Cover
Cover | 3 Months Ended |
Mar. 31, 2024 shares | |
Document Information [Line Items] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Transition Report | false |
Document Period End Date | Mar. 31, 2024 |
Entity File Number | 1-2360 |
Entity Registrant Name | INTERNATIONAL BUSINESS MACHINES CORPORATION |
Entity Incorporation, State or Country Code | NY |
Entity Tax Identification Number | 13-0871985 |
Entity Address, Address Line One | One New Orchard Road |
Entity Address, City or Town | Armonk |
Entity Address, State or Province | NY |
Entity Address, Postal Zip Code | 10504 |
City Area Code | 914 |
Local Phone Number | 499-1900 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 918,602,666 |
Entity Central Index Key | 0000051143 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2024 |
Document Fiscal Period Focus | Q1 |
NEW YORK STOCK EXCHANGE, INC. | Common Stock | |
Document Information [Line Items] | |
Title of 12(b) Security | Capital stock, par value $.20 per share |
Trading Symbol | IBM |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 1.125% Notes due 2024 | |
Document Information [Line Items] | |
Title of 12(b) Security | 1.125% Notes due 2024 |
Trading Symbol | IBM 24A |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 2.875% Notes due 2025 | |
Document Information [Line Items] | |
Title of 12(b) Security | 2.875% Notes due 2025 |
Trading Symbol | IBM 25A |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 0.950% Notes due 2025 | |
Document Information [Line Items] | |
Title of 12(b) Security | 0.950% Notes due 2025 |
Trading Symbol | IBM 25B |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 0.875% Notes due 2025 | |
Document Information [Line Items] | |
Title of 12(b) Security | 0.875% Notes due 2025 |
Trading Symbol | IBM 25C |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 0.300% Notes due 2026 | |
Document Information [Line Items] | |
Title of 12(b) Security | 0.300% Notes due 2026 |
Trading Symbol | IBM 26B |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 1.250% Notes due 2027 | |
Document Information [Line Items] | |
Title of 12(b) Security | 1.250% Notes due 2027 |
Trading Symbol | IBM 27B |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 3.375% Notes due 2027 | |
Document Information [Line Items] | |
Title of 12(b) Security | 3.375% Notes due 2027 |
Trading Symbol | IBM 27F |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 0.300% Notes due 2028 | |
Document Information [Line Items] | |
Title of 12(b) Security | 0.300% Notes due 2028 |
Trading Symbol | IBM 28B |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 1.750% Notes due 2028 | |
Document Information [Line Items] | |
Title of 12(b) Security | 1.750% Notes due 2028 |
Trading Symbol | IBM 28A |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 1.500% Notes due 2029 | |
Document Information [Line Items] | |
Title of 12(b) Security | 1.500% Notes due 2029 |
Trading Symbol | IBM 29 |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 0.875% Notes due 2030 | |
Document Information [Line Items] | |
Title of 12(b) Security | 0.875% Notes due 2030 |
Trading Symbol | IBM 30A |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 1.750% Notes due 2031 | |
Document Information [Line Items] | |
Title of 12(b) Security | 1.750% Notes due 2031 |
Trading Symbol | IBM 31 |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 3.625% Notes due 2031 | |
Document Information [Line Items] | |
Title of 12(b) Security | 3.625% Notes due 2031 |
Trading Symbol | IBM 31B |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 0.650% Notes due 2032 | |
Document Information [Line Items] | |
Title of 12(b) Security | 0.650% Notes due 2032 |
Trading Symbol | IBM 32A |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 1.250% Notes due 2034 | |
Document Information [Line Items] | |
Title of 12(b) Security | 1.250% Notes due 2034 |
Trading Symbol | IBM 34 |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 3.750% Notes due 2035 | |
Document Information [Line Items] | |
Title of 12(b) Security | 3.750% Notes due 2035 |
Trading Symbol | IBM 35 |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 4.875% Notes due 2038 | |
Document Information [Line Items] | |
Title of 12(b) Security | 4.875% Notes due 2038 |
Trading Symbol | IBM 38 |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 1.200% Notes due 2040 | |
Document Information [Line Items] | |
Title of 12(b) Security | 1.200% Notes due 2040 |
Trading Symbol | IBM 40 |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 4.000% Notes due 2043 | |
Document Information [Line Items] | |
Title of 12(b) Security | 4.000% Notes due 2043 |
Trading Symbol | IBM 43 |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 7.00% Debentures due 2025 | |
Document Information [Line Items] | |
Title of 12(b) Security | 7.00% Debentures due 2025 |
Trading Symbol | IBM 25 |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 6.22% Debentures due 2027 | |
Document Information [Line Items] | |
Title of 12(b) Security | 6.22% Debentures due 2027 |
Trading Symbol | IBM 27 |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 6.50% Debentures due 2028 | |
Document Information [Line Items] | |
Title of 12(b) Security | 6.50% Debentures due 2028 |
Trading Symbol | IBM 28 |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 5.875% Debentures due 2032 | |
Document Information [Line Items] | |
Title of 12(b) Security | 5.875% Debentures due 2032 |
Trading Symbol | IBM 32D |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 7.00% Debentures due 2045 | |
Document Information [Line Items] | |
Title of 12(b) Security | 7.00% Debentures due 2045 |
Trading Symbol | IBM 45 |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 7.125% Debentures due 2096 | |
Document Information [Line Items] | |
Title of 12(b) Security | 7.125% Debentures due 2096 |
Trading Symbol | IBM 96 |
Security Exchange Name | NYSE |
NYSE CHICAGO, INC. | Common Stock | |
Document Information [Line Items] | |
Title of 12(b) Security | Capital stock, par value $.20 per share |
Trading Symbol | IBM |
Security Exchange Name | CHX |
CONSOLIDATED INCOME STATEMENT
CONSOLIDATED INCOME STATEMENT - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenue | $ 14,462 | $ 14,252 |
Cost | 6,719 | 6,743 |
Gross profit | 7,742 | 7,509 |
Expense and other (income): | ||
Selling, general and administrative | 4,974 | 4,853 |
Research, development and engineering | 1,796 | 1,655 |
Intellectual property and custom development income | (216) | (180) |
Other (income) and expense | (317) | (245) |
Interest expense | 432 | 367 |
Total expense and other (income) | 6,669 | 6,451 |
Income from continuing operations before income taxes | 1,074 | 1,058 |
Provision for/(benefit from) income taxes | (502) | 124 |
Income from continuing operations | 1,575 | 934 |
Income/(loss) from discontinued operations, net of tax | 30 | (7) |
Net income | $ 1,605 | $ 927 |
Assuming dilution: | ||
Continuing operations (in dollars per share) | $ 1.69 | $ 1.02 |
Discontinued operations (in dollars per share) | 0.03 | (0.01) |
Total (in dollars per share) | 1.72 | 1.01 |
Basic: | ||
Continuing operations (in dollars per share) | 1.72 | 1.03 |
Discontinued operations (in dollars per share) | 0.03 | (0.01) |
Total (in dollars per share) | $ 1.75 | $ 1.02 |
Weighted-average number of common shares outstanding: | ||
Assuming dilution (in shares) | 933,431,312 | 917,845,279 |
Basic (in shares) | 917,178,779 | 907,526,887 |
Services | ||
Revenue | $ 7,470 | $ 7,524 |
Cost | 5,239 | 5,310 |
Sales | ||
Revenue | 6,799 | 6,532 |
Cost | 1,381 | 1,322 |
Financing | ||
Revenue | 192 | 196 |
Cost | $ 99 | $ 110 |
CONSOLIDATED STATEMENT OF COMPR
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 1,605 | $ 927 |
Other comprehensive income/(loss), before tax: | ||
Foreign currency translation adjustments | 55 | (87) |
Net changes related to available-for-sale securities: | ||
Unrealized gains/(losses) arising during the period | 0 | 15 |
Reclassification of (gains)/losses to net income | 0 | 0 |
Total net changes related to available-for-sale securities | 0 | 15 |
Unrealized gains/(losses) on cash flow hedges: | ||
Unrealized gains/(losses) arising during the period | 176 | (29) |
Reclassification of (gains)/losses to net income | 70 | (122) |
Total unrealized gains/(losses) on cash flow hedges | 246 | (151) |
Retirement-related benefit plans: | ||
Prior service costs/(credits) | 0 | 0 |
Net (losses)/gains arising during the period | 1 | 2 |
Curtailments and settlements | 2 | (1) |
Amortization of prior service (credits)/costs | (2) | (2) |
Amortization of net (gains)/losses | 261 | 131 |
Total retirement-related benefit plans | 262 | 130 |
Other comprehensive income/(loss), before tax | 563 | (93) |
Income tax (expense)/benefit related to items of other comprehensive income | (289) | 53 |
Other comprehensive income/(loss), net of tax | 273 | (40) |
Total comprehensive income | $ 1,878 | $ 888 |
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 14,603 | $ 13,068 |
Restricted cash | 162 | 21 |
Marketable securities | 4,512 | 373 |
Notes and accounts receivable — trade (net of allowances of $152 in 2024 and $192 in 2023) | 6,041 | 7,214 |
Short-term financing receivables: | ||
Held for investment (net of allowances of $125 in 2024 and $129 in 2023) | 4,877 | 6,102 |
Held for sale | 644 | 692 |
Other accounts receivable (net of allowances of $38 in 2024 and $109 in 2023) | 760 | 640 |
Inventory, at lower of average cost or net realizable value: | ||
Finished goods | 131 | 78 |
Work in process and raw materials | 1,081 | 1,083 |
Total inventory | 1,212 | 1,161 |
Deferred costs | 1,047 | 998 |
Prepaid expenses and other current assets | 2,804 | 2,639 |
Total current assets | 36,663 | 32,908 |
Property, plant and equipment | 18,071 | 18,122 |
Less: Accumulated depreciation | 12,477 | 12,621 |
Property, plant and equipment — net | 5,594 | 5,501 |
Operating right-of-use assets — net | 3,204 | 3,220 |
Long-term financing receivables (net of allowances of $20 in 2024 and $27 in 2023) | 4,927 | 5,766 |
Prepaid pension assets | 7,545 | 7,506 |
Deferred costs | 810 | 842 |
Deferred taxes | 6,465 | 6,656 |
Goodwill | 59,534 | 60,178 |
Intangible assets — net | 10,750 | 11,036 |
Investments and sundry assets | 1,678 | 1,626 |
Total assets | 137,169 | 135,241 |
Current liabilities: | ||
Taxes | 1,710 | 2,270 |
Short-term debt | 5,471 | 6,426 |
Accounts payable | 3,588 | 4,132 |
Compensation and benefits | 3,190 | 3,501 |
Deferred income | 14,051 | 13,451 |
Operating lease liabilities | 784 | 820 |
Other accrued expenses and liabilities | 3,605 | 3,521 |
Total current liabilities | 32,397 | 34,122 |
Long-term debt | 54,033 | 50,121 |
Retirement and nonpension postretirement benefit obligations | 10,421 | 10,808 |
Deferred income | 3,488 | 3,533 |
Operating lease liabilities | 2,583 | 2,568 |
Other liabilities | 10,914 | 11,475 |
Total liabilities | 113,836 | 112,628 |
IBM stockholders’ equity: | ||
Common stock | 60,145 | 59,643 |
Retained earnings | 151,362 | 151,276 |
Treasury stock - at cost | (169,759) | (169,624) |
Accumulated other comprehensive income/(loss) | (18,488) | (18,761) |
Total IBM stockholders’ equity | 23,261 | 22,533 |
Noncontrolling interests | 72 | 80 |
Total equity | 23,333 | 22,613 |
Total liabilities and equity | $ 137,169 | $ 135,241 |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Notes and accounts receivable - trade, allowances | $ 152 | $ 192 |
Short-term financing receivables, allowances | 125 | 129 |
Other accounts receivable, allowances | 38 | 109 |
Long-term financing receivables, allowances | $ 20 | $ 27 |
Common stock, par value (in dollars per share) | $ 0.20 | $ 0.20 |
Common stock, shares authorized (in shares) | 4,687,500,000 | 4,687,500,000 |
Common stock, shares issued (in shares) | 2,271,074,279 | 2,266,911,160 |
Treasury stock, shares (in shares) | 1,352,471,614 | 1,351,897,514 |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Cash flows from operating activities: | |||
Net income | $ 1,605 | $ 927 | |
Adjustments to reconcile net income to cash provided by operating activities: | |||
Depreciation | [1] | 533 | 527 |
Amortization of capitalized software and acquired intangible assets | 598 | 547 | |
Stock-based compensation | 320 | 268 | |
Net (gain)/loss on divestitures, asset sales and other | [2] | (253) | (5) |
Changes in operating assets and liabilities, net of acquisitions/divestitures | [2] | 1,365 | 1,509 |
Net cash provided by operating activities | 4,168 | 3,774 | |
Cash flows from investing activities: | |||
Payments for property, plant and equipment | (239) | (300) | |
Proceeds from disposition of property, plant and equipment | 12 | 11 | |
Investment in software | (134) | (168) | |
Acquisition of businesses, net of cash acquired | (82) | (22) | |
Divestitures of businesses, net of cash transferred | 703 | 0 | |
Purchases of marketable securities and other investments | (4,934) | (8,531) | |
Proceeds from disposition of marketable securities and other investments | 464 | 1,050 | |
Net cash provided by/(used in) investing activities | (4,210) | (7,960) | |
Cash flows from financing activities: | |||
Proceeds from new debt | 5,486 | 9,432 | |
Payments to settle debt | (2,106) | (2,125) | |
Short-term borrowings/(repayments) less than 90 days — net | 1 | (3) | |
Common stock repurchases for tax withholdings | (199) | (96) | |
Financing — other | 216 | (3) | |
Cash dividends paid | (1,522) | (1,497) | |
Net cash provided by/(used in) financing activities | 1,877 | 5,708 | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (159) | 24 | |
Net change in cash, cash equivalents and restricted cash | 1,676 | 1,547 | |
Cash, cash equivalents and restricted cash at January 1 | 13,089 | 7,988 | |
Cash, cash equivalents and restricted cash at March 31 | $ 14,765 | $ 9,535 | |
[1]Includes operating lease right-of-use assets amortization expense of $0.2 billion in 2024 and 2023.[2]Prior period has been reclassified to conform to the change in 2024 presentation. |
CONSOLIDATED STATEMENT OF CAS_2
CONSOLIDATED STATEMENT OF CASH FLOWS (Parenthetical) - USD ($) $ in Billions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Financial Position [Abstract] | ||
Operating lease right-of-use assets amortization expense | $ 0.2 | $ 0.2 |
CONSOLIDATED STATEMENT OF EQUIT
CONSOLIDATED STATEMENT OF EQUITY - USD ($) $ in Millions | Total | Total IBM Stockholders' Equity | Common Stock and Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income/(Loss) | Non- Controlling Interests |
Balance at the beginning of the period at Dec. 31, 2022 | $ 22,021 | $ 21,944 | $ 58,343 | $ 149,825 | $ (169,484) | $ (16,740) | $ 77 |
Net income plus other comprehensive income/(loss): | |||||||
Net income | 927 | 927 | 927 | ||||
Other comprehensive income/(loss) | (40) | (40) | (40) | ||||
Total comprehensive income | 888 | 888 | |||||
Cash dividends paid - common stock | (1,497) | (1,497) | (1,497) | ||||
Common stock issued under employee plans | 332 | 332 | 332 | ||||
Purchases and sales of treasury stock under employee plans - net | (62) | (62) | (2) | (60) | |||
Changes in noncontrolling interests | (9) | (9) | |||||
Balance at the end of the period at Mar. 31, 2023 | 21,672 | 21,604 | 58,675 | 149,253 | (169,544) | (16,780) | 68 |
Balance at the beginning of the period at Dec. 31, 2023 | 22,613 | 22,533 | 59,643 | 151,276 | (169,624) | (18,761) | 80 |
Net income plus other comprehensive income/(loss): | |||||||
Net income | 1,605 | 1,605 | 1,605 | ||||
Other comprehensive income/(loss) | 273 | 273 | 273 | ||||
Total comprehensive income | 1,878 | 1,878 | |||||
Cash dividends paid - common stock | (1,522) | (1,522) | (1,522) | ||||
Common stock issued under employee plans | 502 | 502 | 502 | ||||
Purchases and sales of treasury stock under employee plans - net | (130) | (130) | 4 | (134) | |||
Changes in noncontrolling interests | (8) | (8) | |||||
Balance at the end of the period at Mar. 31, 2024 | $ 23,333 | $ 23,261 | $ 60,145 | $ 151,362 | $ (169,759) | $ (18,488) | $ 72 |
CONSOLIDATED STATEMENT OF EQU_2
CONSOLIDATED STATEMENT OF EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Stockholders' Equity [Abstract] | ||
Cash dividend per common share (in dollars per share) | $ 1.66 | $ 1.65 |
Common stock issued under employee plans (in shares) | 4,163,119 | 2,380,928 |
Purchases of treasury stock under employee plans (in shares) | 1,087,670 | 711,325 |
Sales of treasury stock under employee plans (in shares) | 513,570 | 283,834 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation: The accompanying Consolidated Financial Statements and footnotes of the International Business Machines Corporation (IBM or the company) have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The financial statements and footnotes are unaudited. In the opinion of the company’s management, these statements include all adjustments, which are only of a normal recurring nature, necessary to present a fair statement of the company’s results of operations, financial position and cash flows. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amount of assets, liabilities, revenue, costs, expenses and other comprehensive income/(loss) that are reported in the Consolidated Financial Statements and accompanying disclosures. These estimates are based on management’s best knowledge of current events, historical experience, actions that the company may undertake in the future and on various other assumptions that are believed to be reasonable under the circumstances. As a result, actual results may be different from these estimates. In the first quarter of 2024, the company made changes to its organizational structure and management system to better align its portfolio to the market, increase transparency and improve segment comparability to peers. These changes did not impact the company's Consolidated Financial Statements, but did impact its reportable segments. Refer to note 4, "Segments," for additional information on the company's reportable segments. The segments are reported on a comparable basis for all periods. For the three months ended March 31, 2024, the company reported a benefit from income taxes of $502 million and its effective tax rate was (46.7) percent. The rate was primarily driven by the resolution of certain tax audit matters. For the three months ended March 31, 2023, the company reported a provision for income taxes of $124 million and its effective tax rate was 11.7 percent. Noncontrolling interest amounts, included as a reduction within other (income) and expense in the Consolidated Income Statement, were not material to the consolidated results for the periods presented. The company has supplier finance programs with third-party financial institutions where the company agrees to pay the financial institutions the stated amounts of invoices from participating suppliers on the originally invoiced maturity date, which have an average term of 90 to 120 days, consistent with the company's standard payment terms. The financial institutions offer earlier payment of the invoices at the sole discretion of the supplier for a discounted amount. The company does not provide secured legal assets or other forms of guarantees under the arrangements. The company is not a party to the arrangements between its suppliers and the financial institutions. These obligations are recognized as accounts payable in the Consolidated Balance Sheet. The obligations outstanding under these programs at March 31, 2024 and December 31, 2023 were $113 million and $101 million, respectively. Interim results are not necessarily indicative of financial results for a full year. The information included in this Form 10-Q should be read in conjunction with the company’s 2023 Annual Report. Within the financial statements and tables presented, certain columns and rows may not add due to the use of rounded numbers for disclosure purposes. Percentages presented are calculated from the underlying whole-dollar amounts. Certain prior-period amounts have been reclassified to conform to the change in current-period presentation. This is annotated where applicable. |
Accounting Changes
Accounting Changes | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Changes and Error Corrections [Abstract] | |
Accounting Changes | Accounting Changes: New Standards to be Implemented Income Tax Disclosures Standard/Description –Issuance date: December 2023. This guidance requires disaggregated disclosure of the tax rate reconciliation into eight categories, with further disaggregation required for items greater than a specific threshold. Additionally, the guidance requires the disclosure of income taxes paid disaggregated by federal, state and foreign jurisdictions. Effective Date and Adoption Considerations –The guidance is effective January 1, 2025 and early adoption is permitted. The company expects to adopt the guidance as of the effective date. Effect on Financial Statements or Other Significant Matters –As the guidance is a change to disclosures only, it will impact the “Taxes” note within the company's annual financial statements but will not impact the consolidated financial results. Segment Reporting Disclosures Standard/Description –Issuance date: November 2023. This guidance requires the disclosure of significant segment expenses that are regularly provided to a company's chief operating decision maker and included within each reported measure of segment profit or loss. The company must also disclose “other segment items,” which is the difference between segment revenue less significant expenses for each reported measure of segment profit or loss, and a description of its composition. This guidance also requires all segment annual disclosures to be provided on an interim basis. Effective Date and Adoption Considerations –The guidance is effective for annual periods beginning in 2024, and for interim periods beginning January 1, 2025, and is required to be applied on a retrospective basis to all prior periods presented. Early adoption is permitted. The company will adopt the guidance as of the effective date. Effect on Financial Statements or Other Significant Matters –As the guidance is a change to disclosures only, it will impact the “Segments” note within the company's quarterly and annual financial statements but will not have an impact in the consolidated financial results. Standards Implemented Disclosures of Supplier Finance Program Obligations Standard/Description– Issuance date: September 2022. This guidance requires an entity to provide certain interim and annual disclosures about the use of supplier finance programs in connection with the purchase of goods or services. Effective Date and Adoption Considerations– The guidance was effective January 1, 2023 with certain annual disclosures required beginning in 2024 and early adoption was permitted. The company adopted the guidance as of the effective date. Effect on Financial Statements or Other Significant Matters– The guidance did not have a material impact in the consolidated financial results. Refer to note 1, "Basis of Presentation," for additional information. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition: Disaggregation of Revenue The following tables provide details of revenue by major products/service offerings and revenue by geography. Revenue by Major Products/Service Offerings (Dollars in millions) For the three months ended March 31: 2024 2023 (1) Hybrid Platform & Solutions $ 4,098 $ 3,850 Transaction Processing 1,800 1,742 Total Software $ 5,899 $ 5,591 Business Transformation 2,317 2,283 Application Operations 1,938 1,989 Technology Consulting 931 925 Total Consulting $ 5,186 $ 5,197 Hybrid Infrastructure 1,803 1,709 Infrastructure Support 1,273 1,389 Total Infrastructure $ 3,076 $ 3,098 Financing (2) 193 196 Other 108 169 Total revenue $ 14,462 $ 14,252 (1) Recast to reflect segment changes. (2) Contains lease and loan financing arrangements which are not subject to the guidance on revenue from contracts with customers. Revenue by Geography (Dollars in millions) For the three months ended March 31: 2024 2023 Americas $ 7,296 $ 7,078 Europe/Middle East/Africa 4,313 4,331 Asia Pacific 2,853 2,843 Total $ 14,462 $ 14,252 Remaining Performance Obligations The remaining performance obligation (RPO) disclosure provides the aggregate amount of the transaction price yet to be recognized as of the end of the reporting period and an explanation as to when the company expects to recognize these amounts in revenue. It is intended to be a statement of overall work under contract that has not yet been performed and does not include contracts in which the customer is not committed, such as certain as-a-Service, governmental, term software license and services offerings. The customer is not considered committed when they are able to terminate for convenience without payment of a substantive penalty. The disclosure includes estimates of variable consideration, except when the variable consideration is a sales-based or usage-based royalty promised in exchange for a license of intellectual property. Additionally, as a practical expedient, the company does not include contracts that have an original duration of one year or less. RPO estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts, periodic revalidations, adjustment for revenue that has not materialized and adjustments for currency. At March 31, 2024, the aggregate amount of the transaction price allocated to RPO related to customer contracts that are unsatisfied or partially unsatisfied was approximately $56 billion. Approximately 70 percent of the amount is expected to be recognized as revenue in the subsequent two years, approximately 27 percent in the subsequent three Revenue Recognized for Performance Obligations Satisfied (or Partially Satisfied) in Prior Periods For the three months ended March 31, 2024, revenue recognized for performance obligations satisfied or partially satisfied in prior periods was immaterial. Reconciliation of Contract Balances The following table provides information about notes and accounts receivable–trade, contract assets and deferred income balances. (Dollars in millions) At March 31, 2024 At December 31, 2023 Notes and accounts receivable — trade (net of allowances of $152 in 2024 and $192 in 2023) $ 6,041 $ 7,214 Contract assets (1) $ 527 $ 505 Deferred income (current) $ 14,051 $ 13,451 Deferred income (noncurrent) $ 3,488 $ 3,533 (1) Included within prepaid expenses and other current assets in the Consolidated Balance Sheet. The amount of revenue recognized during the three months ended March 31, 2024 that was included within the deferred income balance at December 31, 2023 was $4.3 billion and was primarily related to software and services. The following table provides roll forwards of the notes and accounts receivable–trade allowance for expected credit losses for the three months ended March 31, 2024 and the year ended December 31, 2023. (Dollars in millions) January 1, 2024 Additions / (Releases) Write-offs (1) Foreign currency and other March 31, 2024 $192 $(8) $(29) $(3) $152 January 1, 2023 Additions / (Releases) Write-offs (1) Foreign currency and other December 31, 2023 $233 $32 $(79) $6 $192 (1) The majority of the write-offs during the period related to receivables which had been previously reserved. The contract assets allowance for expected credit losses was not material in any of the periods presented. |
Segments
Segments | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Segments | Segments: In the first quarter of 2024, the company made changes to its organization structure and management system to better align its portfolio with the market, increase transparency and improve segment comparability to peers. These changes did not impact the company's Consolidated Financial Statements, but did impact its reportable segments. Due to the removal of certain components of segment profitability, as described below, the company also updated the title of its segment performance metric from pre-tax income from continuing operations to segment profit. The following table displays the segment updates: Reportable Segment Change Resulting Segment Implications The Weather Company asset divestiture - Software Segment + Other-divested businesses Security Services realignment - Software Segment + Consulting Segment Removal of stock-based compensation and net interest allocations from segment profitability - Software Segment, Consulting Segment, Infrastructure Segment, Financing Segment (1) + Other (1) Presentation of interest for the Financing Segment did not change. The following tables reflect the results of continuing operations of the company’s segments consistent with the management and measurement system utilized within the company and have been recast for the prior-year periods to reflect the company's segment changes described above. These results are used by the chief operating decision maker, both in evaluating the performance of, and in allocating resources to, each of the segments. SEGMENT INFORMATION (Dollars in millions) Software Consulting Infrastructure Financing Total For the three months ended March 31, 2024: Revenue $ 5,899 $ 5,186 $ 3,076 $ 193 $ 14,354 Segment profit $ 1,500 $ 424 $ 311 $ 92 $ 2,327 Revenue year-to-year change 5.5 % (0.2) % (0.7) % (1.6) % 1.9 % Segment profit year-to-year change 8.8 % (0.6) % 1.4 % (8.4) % 5.2 % Segment profit margin 25.4 % 8.2 % 10.1 % 47.7 % 16.2 % For the three months ended March 31, 2023 (1) Revenue $ 5,591 $ 5,197 $ 3,098 $ 196 $ 14,083 Segment profit $ 1,379 $ 427 $ 307 $ 100 $ 2,213 Segment profit margin 24.7 % 8.2 % 9.9 % 51.2 % 15.7 % (1) Recast to reflect segment changes. Reconciliations to IBM as Reported: (Dollars in millions) For the three months ended March 31: 2024 2023 (1) Revenue: Total reportable segments $ 14,354 $ 14,083 Other ‒ divested businesses 35 94 Other revenue 73 75 Total revenue from continuing operations $ 14,462 $ 14,252 Pre-tax income from continuing operations: Total reportable segment profit $ 2,327 $ 2,213 Amortization of acquired intangible assets (428) (392) Acquisition-related (charges)/income (2) (60) (3) Non-operating retirement-related (costs)/income (96) 5 Stock-based compensation (320) (268) Net interest excluding the Financing segment (223) (217) Workforce rebalancing charges (374) (259) Other ‒ divested businesses (3) 239 13 Unallocated corporate amounts and other 9 (33) Total pre-tax income from continuing operations $ 1,074 $ 1,058 (1) Recast to reflect segment changes. (2) 2024 includes the impact of foreign exchange call option contracts in connection with the planned acquisition of StreamSets and webMethods from Software AG. Refer to note 16, "Derivative Financial Instruments," for additional information. (3) 2024 includes a gain on the sale of The Weather Company assets. Refer to note 5, "Acquisitions & Divestitures," for additional |
Acquisitions & Divestitures
Acquisitions & Divestitures | 3 Months Ended |
Mar. 31, 2024 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions & Divestitures | Acquisitions & Divestitures: Acquisitions Purchase price consideration for all acquisitions was paid primarily in cash. All acquisitions, unless otherwise stated, were for 100 percent of the acquired business and are reported in the Consolidated Statement of Cash Flows, net of acquired cash and cash equivalents. During the three months ended March 31, 2024, the company completed two acquisitions within the Software segment and one acquisition within the Consulting segment at an aggregate cost of $255 million. These acquisitions are expected to enhance the company’s portfolio of products and services capabilities and further advance IBM’s hybrid cloud and AI strategy. These acquisitions did not have a material impact in the company's Consolidated Financial Statements. At March 31, 2024, the remaining cash to be remitted by the company related to certain first-quarter 2024 acquisitions was $157 million. Of the amount outstanding, $144 million was recorded as restricted cash in the Consolidated Balance Sheet, most of which was paid in April 2024. The amount outstanding is primarily a non-cash investing activity for purposes of the company's Consolidated Statement of Cash Flows as of March 31, 2024. The following table reflects the purchase price related to the first-quarter acquisitions and the resulting purchase price allocation as of March 31, 2024. (Dollars in millions) Amortization All Current assets $ 17 Property, plant and equipment/noncurrent assets 2 Intangible assets: Goodwill N/A 195 Client relationships 2-7 31 Completed technology 7 37 Trademarks 3 0 Total assets acquired $ 284 Current liabilities 13 Noncurrent liabilities 15 Total liabilities assumed $ 29 Total purchase price $ 255 N/A – not applicable The valuation of the assets acquired and liabilities assumed is subject to revision. If additional information becomes available, the company may further revise the purchase price allocation as soon as practical, but no later than one year from the acquisition date. Transactions Announced — On December 18, 2023, the company entered into a definitive agreement with Software AG to acquire StreamSets and webMethods, Software AG's Super iPaaS (integration platform-as-a-service) enterprise technology platforms, for approximately €2.13 billion in cash. StreamSets will add data ingestion capabilities to watsonx, and webMethods will provide clients and partners additional integration and API management tools for their hybrid multi-cloud environments. The acquisition is expected to close in mid-year 2024 subject to customary closing conditions, including regulatory clearance, and upon closing, will be integrated into the Software segment. In connection with the planned acquisition, on December 18, 2023 the company entered into foreign exchange call option contracts for a premium of $49 million to purchase a total of €2.13 billion on June 18, 2024 at a strike price of 1.095. Refer to note 16, “Derivative Financial Instruments,” for additional information. On April 24, 2024, the company announced its intent to acquire all of the outstanding shares of HashiCorp, Inc., (HashiCorp). The combination of IBM’s and HashiCorp’s combined portfolios will help clients manage growing application and infrastructure complexity and create a comprehensive end-to-end hybrid cloud platform designed for the AI era. Under the terms of the definitive agreement, HashiCorp shareholders will receive $35 per share in cash, representing a total enterprise value of approximately $6.4 billion. The transaction is expected to close by the end of 2024, subject to approval by HashiCorp shareholders, regulatory approvals and other customary closing conditions. Upon closing, HashiCorp will be integrated into the Software segment. Divestitures The Weather Company Assets — In August 2023, IBM and Zephyr Buyer, L.P., a wholly-owned subsidiary of Francisco Partners (collectively, Francisco), entered into a definitive agreement under which Francisco would acquire The Weather Company assets from IBM for $1,100 million inclusive of $250 million of contingent consideration, of which $200 million is contingent on Francisco’s attainment of certain investment return metrics. The assets include The Weather Company's digital consumer-facing offerings, The Weather Channel mobile and cloud-based digital properties including Weather.com, Weather Underground and Storm Radar, as well as its enterprise offerings for broadcast, media, aviation, advertising technology and data solutions for other emerging industries. |
Other (Income) and Expense
Other (Income) and Expense | 3 Months Ended |
Mar. 31, 2024 | |
Other Income and Expenses [Abstract] | |
Other (Income) and Expense | Other (Income) and Expense : Components of other (income) and expense are as follows: (Dollars in millions) For the three months ended March 31: 2024 2023 Other (income) and expense: Foreign currency transaction losses/(gains) (1) $ (205) $ 88 (Gains)/losses on derivative instruments (1) 287 (142) Interest income (210) (170) Net (gains)/losses from securities and investment assets (10) 5 Retirement-related costs/(income) 96 (5) Other (2) (274) (22) Total other (income) and expense $ (317) $ (245) (1) The company uses financial hedging instruments to limit specific currency risks related to foreign currency-based transactions. The hedging program does not hedge 100 percent of currency exposures and defers, versus eliminates, the impact of currency. Refer to note 16, "Derivative Financial Instruments," for additional information on foreign exchange risk. (2) 2024 includes a pre-tax gain of $241 million from the divestiture of The Weather Company assets. Refer to note 5, "Acquisitions & Divestitures," for additional information. |
Earnings Per Share of Common St
Earnings Per Share of Common Stock | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Earnings Per Share of Common Stock | Earnings Per Share of Common Stock : The following table provides the computation of basic and diluted earnings per share of common stock for the three months ended March 31, 2024 and 2023. (Dollars in millions except per share amounts) For the three months ended March 31: 2024 2023 Number of shares on which basic earnings per share is calculated: Weighted-average shares outstanding during period 917,178,779 907,526,887 Add — Incremental shares under stock-based compensation plans 14,256,390 8,609,239 Add — Incremental shares associated with contingently issuable shares 1,996,144 1,709,153 Number of shares on which diluted earnings per share is calculated 933,431,312 917,845,279 Income from continuing operations $ 1,575 $ 934 Income/(loss) from discontinued operations, net of tax 30 (7) Net income on which basic earnings per share is calculated $ 1,605 $ 927 Income from continuing operations $ 1,575 $ 934 Net income applicable to contingently issuable shares — — Income from continuing operations on which diluted earnings per share is calculated $ 1,575 $ 934 Income/(loss) from discontinued operations, net of tax, on which diluted earnings per share is calculated 30 (7) Net income on which diluted earnings per share is calculated $ 1,605 $ 927 Earnings/(loss) per share of common stock: Assuming dilution Continuing operations $ 1.69 $ 1.02 Discontinued operations 0.03 (0.01) Total $ 1.72 $ 1.01 Basic Continuing operations $ 1.72 $ 1.03 Discontinued operations 0.03 (0.01) Total $ 1.75 $ 1.02 Stock options to purchase 61,359 shares and 960,929 shares were outstanding as of March 31, 2024 and 2023, respectively, but were not included in the computation of diluted earnings per share because the exercise price of the options during the respective period was greater than the average market price of the common shares, and therefore, the effect would have been antidilutive. |
Financial Assets & Liabilities
Financial Assets & Liabilities | 3 Months Ended |
Mar. 31, 2024 | |
Investments, All Other Investments [Abstract] | |
Financial Assets & Liabilities | Financial Assets & Liabilities: Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The company classifies certain assets and liabilities based on the following fair value hierarchy: • Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that can be accessed at the measurement date; • Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and • Level 3 – Unobservable inputs for the asset or liability. When available, the company uses unadjusted quoted market prices in active markets to measure the fair value and classifies such items as Level 1. If quoted market prices are not available, fair value is based upon internally developed models that use current market-based or independently sourced market parameters such as interest rates and currency rates. Items valued using internally generated models are classified according to the lowest level input or value driver that is significant to the valuation. The determination of fair value considers various factors including interest rate yield curves and time value underlying the financial instruments. For derivatives and debt securities, the company uses a discounted cash flow analysis using discount rates commensurate with the duration of the instrument. In determining the fair value of financial instruments, the company considers certain market valuation adjustments to the “base valuations” calculated using the methodologies described below for several parameters that market participants would consider in determining fair value: • Counterparty credit risk adjustments are applied to financial instruments, taking into account the actual credit risk of a counterparty as observed in the credit default swap market to determine the true fair value of such an instrument. • Credit risk adjustments are applied to reflect the company’s own credit risk when valuing all liabilities measured at fair value. The methodology is consistent with that applied in developing counterparty credit risk adjustments, but incorporates the company’s own credit risk as observed in the credit default swap market. The company holds investments primarily in time deposits, certificates of deposit, and U.S. government debt that are designated as available-for-sale. The primary objective of the company’s cash and debt investment portfolio is to protect principal by investing in very liquid investment securities with highly rated counterparties. The company’s standard practice is to hold all of its debt security investments classified as available-for-sale until maturity. No impairments for credit losses and no material non-credit impairments were recorded for the three months ended March 31, 2024 and 2023, respectively. Certain non-financial assets such as property, plant and equipment, operating right-of-use assets, goodwill and intangible assets are also subject to nonrecurring fair value measurements if they are deemed to be impaired. The impairment models used for non-financial assets depend on the type of asset. There were no material impairments of non-financial assets for the three months ended March 31, 2024 and 2023, respectively. The following table presents the company’s financial assets and financial liabilities that are measured at fair value on a recurring basis at March 31, 2024 and December 31, 2023. Fair Value At March 31, 2024 At December 31, 2023 (Dollars in millions) Assets (6) Liabilities (7) Assets (6) Liabilities (7) Cash equivalents: (1) Time deposits and certificates of deposit (2) 2 $ 7,232 N/A $ 7,206 N/A Money market funds 1 487 N/A 494 N/A Total cash equivalents $ 7,719 N/A $ 7,699 N/A Equity investments 1 7 N/A 25 N/A Debt securities-current (2)(3) 2 4,512 N/A 373 N/A Debt securities-noncurrent (2)(4) 2,3 108 N/A 8 N/A Derivatives designated as hedging instruments: Interest rate contracts 2 — 436 2 299 Foreign exchange contracts 2 263 102 131 275 Derivatives not designated as hedging instruments: Foreign exchange contracts (5) 2 23 25 115 19 Equity contracts 2 55 1 93 — Total $ 12,686 $ 564 $ 8,446 $ 593 (1) Included within cash and cash equivalents in the Consolidated Balance Sheet. (2) Available-for-sale debt securities with carrying values that approximate fair value. (3) Term deposits and U.S. treasury bills that are reported within marketable securities in the Consolidated Balance Sheet. The March 31, 2024 balance includes proceeds from the first quarter 2024 debt issuance. Refer to note 12, “Borrowings,” for additional information. (4) March 31, 2024 includes a $100 million seller financing loan in connection with the divestiture of The Weather Company assets reported within investments and sundry assets in the Consolidated Balance Sheet. Refer to note 5, "Acquisitions & Divestitures," for additional information. (5) Asset amounts include $12 million and $62 million at March 31, 2024 and December 31, 2023, respectively, related to foreign exchange call option contracts in connection with the planned acquisition of StreamSets and webMethods from Software AG. Refer to note 16, "Derivative Financial Instruments," for additional information. (6) The gross balances of derivative assets contained within prepaid expenses and other current assets, and investments and sundry assets in the Consolidated Balance Sheet at March 31, 2024 were $328 million and $12 million, respectively, and at December 31, 2023 were $304 million and $37 million, respectively. (7) The gross balances of derivative liabilities contained within other accrued expenses and liabilities, and other liabilities in the Consolidated Balance Sheet at March 31, 2024 were $95 million and $469 million, respectively, and at December 31, 2023 were $294 million and $299 million, respectively. N/A – not applicable Financial Assets and Liabilities Not Measured at Fair Value Short-Term Receivables and Payables Short-term receivables (excluding the current portion of long-term receivables) and other investments are financial assets with carrying values that approximate fair value. Accounts payable, other accrued expenses and short-term debt (excluding the current portion of long-term debt) are financial liabilities with carrying values that approximate fair value. If measured at fair value in the financial statements, these financial instruments would be classified as Level 3 in the fair value hierarchy, except for short-term debt which would be classified as Level 2. Loans and Long-Term Receivables Fair values are based on discounted future cash flows using current interest rates offered for similar loans to clients with similar credit ratings for the same remaining maturities. At March 31, 2024 and December 31, 2023, the difference between the carrying amount and estimated fair value for loans and long-term receivables was immaterial. If measured at fair value in the financial statements, these financial instruments would be classified as Level 3 in the fair value hierarchy. Long-Term Debt Fair value of publicly traded long-term debt is based on quoted market prices for the identical liability when traded as an asset in an active market. For other long-term debt (including long-term finance lease liabilities) for which a quoted market price is not available, an expected present value technique that uses rates currently available to the company for debt with similar terms and remaining maturities is used to estimate fair value. The carrying amount of long-term debt was $54,033 million and $50,121 million, and the estimated fair value was $51,656 million and $48,284 million at March 31, 2024 and December 31, 2023, respectively. If measured at fair value in the financial statements, long-term debt (including the current portion) would be classified as Level 2 in the fair value hierarchy. |
Financing Receivables
Financing Receivables | 3 Months Ended |
Mar. 31, 2024 | |
Receivables [Abstract] | |
Financing Receivables | Financing Receivables: Financing receivables primarily consist of client loan and installment payment receivables (loans), investment in sales-type and direct financing leases (collectively referred to as client financing receivables) and commercial financing receivables. Loans are provided primarily to clients to finance the purchase of IBM hardware, software and services. Payment terms on these financing arrangements are for terms generally up to seven years. Investment in sales-type and direct financing leases relate principally to the company’s Infrastructure products and are for terms generally up to five years. Commercial financing receivables, which consist of both held-for-investment and held-for-sale receivables, relate primarily to working capital financing for business partners and distributors of IBM products and services. Payment terms for working capital financing generally range from 30 to 60 days. A summary of the components of the company’s financing receivables is presented as follows: Client Financing Receivables Client Loan and Installment Payment Receivables Investment in Sales-Type and Direct Financing Commercial Financing Receivables (Dollars in millions) Held for Held for At March 31, 2024 (Loans) Leases Investment Sale (1) Total Financing receivables, gross $ 5,983 $ 3,949 $ 441 $ 644 $ 11,017 Unearned income (446) (402) — — (848) Unguaranteed residual value — 424 — — 424 Amortized cost $ 5,537 $ 3,971 $ 441 $ 644 $ 10,593 Allowance for credit losses (82) (57) (6) — (145) Total financing receivables, net $ 5,455 $ 3,914 $ 435 $ 644 $ 10,448 Current portion $ 2,949 $ 1,493 $ 435 $ 644 $ 5,521 Noncurrent portion $ 2,506 $ 2,421 $ — $ — $ 4,927 Client Financing Receivables Client Loan and Installment Payment Receivables Investment in Sales-Type and Direct Financing Commercial Financing Receivables (Dollars in millions) Held for Held for At December 31, 2023 (Loans) Leases Investment Sale (1) Total Financing receivables, gross $ 7,060 $ 4,261 $ 1,160 $ 692 $ 13,173 Unearned income (486) (429) — — (915) Unguaranteed residual value — 458 — — 458 Amortized cost $ 6,574 $ 4,290 $ 1,160 $ 692 $ 12,716 Allowance for credit losses (87) (63) (6) — (156) Total financing receivables, net $ 6,486 $ 4,227 $ 1,155 $ 692 $ 12,560 Current portion $ 3,427 $ 1,520 $ 1,155 $ 692 $ 6,793 Noncurrent portion $ 3,059 $ 2,707 $ — $ — $ 5,766 (1) The carrying value of the receivables classified as held for sale approximates fair value. The company has a long-standing practice of taking mitigation actions, in certain circumstances, to transfer credit risk to third parties. These actions may include credit insurance, financial guarantees, nonrecourse secured borrowings, transfers of receivables recorded as true sales in accordance with accounting guidance or sales of equipment under operating lease. Sale of receivables arrangements are also utilized in the normal course of business as part of the company’s cash and liquidity management. Financing receivables pledged as collateral for secured borrowings were $193 million and $232 million at March 31, 2024 and December 31, 2023, respectively. These borrowings are included in note 12, “Borrowings.” Transfer of Financial Assets The company has an existing agreement with a third-party investor to sell IBM short-term commercial financing receivables on a revolving basis. This agreement previously allowed for sales up to $3.0 billion. In December 2023, the company amended and renewed its agreement for a one-year term to sell these receivables up to $1.9 billion, which reduced to $1.3 billion in January 2024. In addition, the company enters into agreements with third-party financial institutions to sell certain of its client financing receivables, including both loan and lease receivables, for cash proceeds. There were no material client financing receivables transferred for the three months ended March 31, 2024 and 2023. The following table presents the total amount of commercial financing receivables transferred. (Dollars in millions) For the three months ended March 31: 2024 2023 Commercial financing receivables: Receivables transferred during the period $ 1,802 $ 2,233 Receivables uncollected at end of period (1) $ 655 $ 780 (1) Of the total amount of commercial financing receivables sold and derecognized from the Consolidated Balance Sheet, the amounts presented remained uncollected from business partners as of March 31, 2024 and 2023. The transfer of these receivables qualified as true sales and therefore reduced financing receivables. The cash proceeds from the sales are included in cash flows from operating activities. For the three months ended March 31, 2024 and 2023, the net loss, including fees, associated with the transfer of commercial financial receivables was $15 million and $24 million, respectively, and is included in other (income) and expense in the Consolidated Income Statement. Financing Receivables by Portfolio Segment The following tables present the amortized cost basis for client financing receivables at March 31, 2024 and December 31, 2023, further segmented by three classes: Americas, Europe/Middle East/Africa (EMEA) and Asia Pacific. The commercial financing receivables portfolio segment is excluded from the tables in the sections below as the receivables are short term in nature and the current estimated risk of loss and resulting impact to the company’s financial results are not material. (Dollars in millions) At March 31, 2024: Americas EMEA Asia Pacific Total Amortized cost $ 5,722 $ 2,511 $ 1,275 $ 9,508 Allowance for credit losses: Beginning balance at January 1, 2024 $ 92 $ 48 $ 11 $ 150 Write-offs $ 0 $ 0 $ — $ 0 Recoveries 0 0 0 0 Additions/(releases) (10) 0 1 (10) Other (1) 0 (1) 0 (1) Ending balance at March 31, 2024 $ 82 $ 46 $ 12 $ 139 (1) Primarily represents translation adjustments. (Dollars in millions) At December 31, 2023: Americas EMEA Asia Pacific Total Amortized cost $ 6,488 $ 3,007 $ 1,368 $ 10,863 Allowance for credit losses: Beginning balance at January 1, 2023 $ 88 $ 60 $ 20 $ 168 Write-offs $ (9) $ (1) $ (8) $ (18) Recoveries 0 2 3 5 Additions/(releases) 5 (14) (4) (12) Other (1) 7 1 (1) 8 Ending balance at December 31, 2023 $ 92 $ 48 $ 11 $ 150 (1) Primarily represents translation adjustments. When determining the allowances, financing receivables are evaluated either on an individual or a collective basis. For the company’s policy on determining allowances for credit losses, refer to note A, “Significant Accounting Policies,” in the company’s 2023 Annual Report. Past Due Financing Receivables The company summarizes information about the amortized cost basis for client financing receivables, including amortized cost aged over 90 days and still accruing, billed invoices aged over 90 days and still accruing, and amortized cost not accruing. (Dollars in millions) Total Amortized Cost > 90 Days (1) Amortized Cost > 90 Days and Accruing (1) Billed Amortized Cost Not Accruing (2) At March 31, 2024: Americas $ 5,722 $ 102 $ 33 $ 3 $ 71 EMEA 2,511 41 12 4 30 Asia Pacific 1,275 8 0 0 8 Total client financing receivables $ 9,508 $ 152 $ 45 $ 8 $ 109 (Dollars in millions) Total Amortized Cost > 90 Days (1) Amortized Cost > 90 Days and Accruing (1) Billed Amortized Cost Not Accruing (2) At December 31, 2023: Americas $ 6,488 $ 111 $ 40 $ 6 $ 71 EMEA 3,007 31 1 1 31 Asia Pacific 1,368 9 1 0 8 Total client financing receivables $ 10,863 $ 151 $ 43 $ 7 $ 110 (1) At a contract level, which includes total billed and unbilled amounts for financing receivables aged greater than 90 days. (2) Of the amortized cost not accruing, there was a related allowance of $105 million and $106 million at March 31, 2024 and December 31, 2023, respectively. Financing income recognized on these receivables was immaterial for the three months ended March 31, 2024 and 2023, respectively. Credit Quality Indicators The company’s credit quality indicators, which are based on rating agency data, publicly available information and information provided by customers, are reviewed periodically based on the relative level of risk. The resulting indicators are a numerical rating system that maps to Moody’s Investors Service credit ratings as shown below. The company uses information provided by Moody’s, where available, as one of many inputs in its determination of customer credit ratings. The credit quality of the customer is evaluated based on these indicators and is assigned the same risk rating whether the receivable is a lease or a loan. The following tables present the amortized cost basis for client financing receivables by credit quality indicator at March 31, 2024 and December 31, 2023, respectively. Receivables with a credit quality indicator ranging from Aaa to Baa3 are considered investment grade. All others are considered non-investment grade. The credit quality indicators reflect mitigating credit enhancement actions taken by customers which reduce the risk to IBM. Gross write-offs by vintage year at March 31, 2024 and December 31, 2023 were not material. (Dollars in millions) Americas EMEA Asia Pacific At March 31, 2024: Aaa – Baa3 Ba1 – C Aaa – Baa3 Ba1 – C Aaa – Baa3 Ba1 – C Vintage year: 2024 $ 241 $ 219 $ 73 $ 108 $ 125 $ 26 2023 1,929 782 552 413 398 57 2022 1,426 216 557 297 349 38 2021 504 61 227 60 83 33 2020 115 54 66 44 74 19 2019 and prior 111 63 56 57 56 17 Total $ 4,327 $ 1,395 $ 1,531 $ 980 $ 1,085 $ 189 (Dollars in millions) Americas EMEA Asia Pacific At December 31, 2023: Aaa – Baa3 Ba1 – C Aaa – Baa3 Ba1 – C Aaa – Baa3 Ba1 – C Vintage year: 2023 $ 2,292 $ 1,028 $ 750 $ 520 $ 501 $ 70 2022 1,645 268 687 374 386 42 2021 655 85 284 83 110 40 2020 205 79 106 60 97 22 2019 104 23 58 38 40 8 2018 and prior 55 50 16 30 39 12 Total $ 4,955 $ 1,533 $ 1,901 $ 1,106 $ 1,174 $ 195 Modifications The company did not have any significant modifications due to financial difficulty during the three months ended March 31, 2024 or for the year ended December 31, 2023. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Leases | Leases: Accounting for Leases as a Lessor The following table presents amounts included in the Consolidated Income Statement related to lessor activity. (Dollars in millions) For the three months ended March 31: 2024 2023 Lease income — sales-type and direct financing leases: Sales-type lease selling price $ 113 $ 90 Less: Carrying value of underlying assets (1) (28) (30) Gross profit $ 85 $ 61 Interest income on lease receivables 69 59 Total sales-type and direct financing lease income $ 154 $ 119 Lease income — operating leases 18 26 Variable lease income 20 21 Total lease income $ 192 $ 166 (1) Excludes unguaranteed residual value. |
Leases | Leases: Accounting for Leases as a Lessor The following table presents amounts included in the Consolidated Income Statement related to lessor activity. (Dollars in millions) For the three months ended March 31: 2024 2023 Lease income — sales-type and direct financing leases: Sales-type lease selling price $ 113 $ 90 Less: Carrying value of underlying assets (1) (28) (30) Gross profit $ 85 $ 61 Interest income on lease receivables 69 59 Total sales-type and direct financing lease income $ 154 $ 119 Lease income — operating leases 18 26 Variable lease income 20 21 Total lease income $ 192 $ 166 (1) Excludes unguaranteed residual value. |
Leases | Leases: Accounting for Leases as a Lessor The following table presents amounts included in the Consolidated Income Statement related to lessor activity. (Dollars in millions) For the three months ended March 31: 2024 2023 Lease income — sales-type and direct financing leases: Sales-type lease selling price $ 113 $ 90 Less: Carrying value of underlying assets (1) (28) (30) Gross profit $ 85 $ 61 Interest income on lease receivables 69 59 Total sales-type and direct financing lease income $ 154 $ 119 Lease income — operating leases 18 26 Variable lease income 20 21 Total lease income $ 192 $ 166 (1) Excludes unguaranteed residual value. |
Intangible Assets Including Goo
Intangible Assets Including Goodwill | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets Including Goodwill | Intangible Assets Including Goodwill: Intangible Assets The following tables present the company's intangible asset balances by major asset class. At March 31, 2024 (Dollars in millions) Gross Carrying Accumulated Net Carrying Amount (1) Intangible asset class: Capitalized software $ 1,566 $ (663) $ 903 Client relationships 9,014 (3,699) 5,316 Completed technology 5,726 (2,668) 3,059 Patents/trademarks 1,808 (458) 1,350 Other (2) 151 (28) 123 Total $ 18,266 $ (7,516) $ 10,750 At December 31, 2023 (Dollars in millions) Gross Carrying Accumulated Net Carrying Amount (1) Intangible asset class: Capitalized software $ 1,636 $ (762) $ 874 Client relationships 9,053 (3,500) 5,553 Completed technology 5,713 (2,510) 3,203 Patents/trademarks 1,821 (436) 1,385 Other (2) 41 (20) 22 Total $ 18,265 $ (7,229) $ 11,036 (1) Amounts as of March 31, 2024 and December 31, 2023 include a decrease in net intangible asset balances of $57 million and an increase of $50 million, respectively, due to foreign currency translation. (2) Other intangibles are primarily acquired proprietary and non-proprietary technology licenses, data, business processes, methodologies and systems. The net carrying amount of intangible assets decreased $287 million during the first three months of 2024, primarily due to intangible asset amortization, partially offset by additions of capitalized software and acquired intangibles. The aggregate intangible asset amortization expense was $598 million and $547 million for the three months ended March 31, 2024 and 2023, respectively. In the first three months of 2024, the company retired $224 million of fully amortized intangible assets, impacting both the gross carrying amount and accumulated amortization by this amount. The future amortization expense relating to intangible assets currently recorded in the Consolidated Balance Sheet was estimated to be the following at March 31, 2024: (Dollars in millions) Capitalized Acquired Total Remainder of 2024 $ 443 $ 1,321 $ 1,764 2025 310 1,729 2,040 2026 140 1,705 1,845 2027 10 1,686 1,695 2028 — 1,384 1,384 Thereafter — 2,022 2,022 Goodwill The changes in the goodwill balances by segment for the three months ended March 31, 2024 and for the year ended December 31, 2023 were as follows: (Dollars in millions) Balance Goodwill Purchase Foreign Currency Translation and Other Adjustments (1) Balance Segment 1/1/2024 Divestitures 3/31/2024 Software $ 46,447 $ 91 $ (4) $ — $ (304) $ 46,230 Consulting 8,883 96 0 — (57) 8,922 Infrastructure 4,384 8 — — (11) 4,381 Other (2) 464 — — (464) — — Total $ 60,178 $ 195 $ (4) $ (464) $ (372) $ 59,534 (Dollars in millions) Balance Goodwill Purchase Foreign Currency Translation and Other Adjustments (1) Balance Segment 1/1/2023 Divestitures 12/31/2023 Software (3) $ 42,712 $ 3,538 $ (17) $ — $ 214 $ 46,447 Consulting (3) 8,409 403 2 — 69 8,883 Infrastructure 4,363 12 — — 8 4,384 Other (3) 464 — — — — 464 Total $ 55,949 $ 3,953 $ (15) $ — $ 291 $ 60,178 (1) Primarily driven by foreign currency translation. (2) The company derecognized goodwill related to the divestiture of The Weather Company assets. Refer to note 5, "Acquisitions & Divestitures," for additional information. (3) Recast to reflect segment changes. There were no goodwill impairment losses recorded during the first three months of 2024 or full-year 2023 and the company has no accumulated impairment losses. Purchase price adjustments recorded in the first three months of 2024 and full-year 2023 were related to acquisitions that were still subject to the measurement period that ends at the earlier of 12 months from the acquisition date or when information becomes available. Net purchase price adjustments recorded in the first three months of 2024 and full-year 2023 were not material. |
Borrowings
Borrowings | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings: Short-Term Debt The company's total short-term debt at March 31, 2024 and December 31, 2023 was $5,471 million and $6,426 million, respectively, and primarily consisted of current maturities of long-term debt detailed in "Long-Term Debt" below. Long-Term Debt Pre-Swap Borrowing Balance Balance (Dollars in millions) Maturities 3/31/2024 12/31/2023 U.S. dollar debt (weighted-average interest rate at March 31, 2024): (1) 3.0% 2024 $ 3,002 $ 5,003 5.1% 2025 1,605 1,601 3.7% 2026 5,800 5,201 3.3% 2027 4,119 3,619 5.0% 2028 1,313 1,313 3.6% 2029 3,750 3,250 2.0% 2030 1,350 1,350 4.8% 2031 500 — 4.4% 2032 1,850 1,850 4.8% 2033 750 750 4.9% 2034 1,000 — 8.0% 2038 83 83 4.5% 2039 2,745 2,745 2.9% 2040 650 650 4.0% 2042 1,107 1,107 5.3% 2044 1,000 — 7.0% 2045 27 27 4.7% 2046 650 650 4.3% 2049 3,000 3,000 3.0% 2050 750 750 4.2% 2052 1,400 1,400 5.1% 2053 650 650 5.3% 2054 1,400 — 7.1% 2096 316 316 $ 38,819 $ 35,317 Euro debt (weighted-average interest rate at March 31, 2024): (1) 1.1% 2024 $ 809 $ 829 1.6% 2025 3,237 3,315 2.3% 2027 2,158 2,210 0.7% 2028 1,942 1,989 1.5% 2029 1,079 1,105 0.9% 2030 1,079 1,105 2.7% 2031 2,698 2,762 0.7% 2032 1,726 1,768 1.3% 2034 1,079 1,105 3.8% 2035 1,079 1,105 1.2% 2040 917 939 4.0% 2043 1,079 1,105 $ 18,883 $ 19,335 Other currencies (weighted-average interest rate at March 31, 2024 in parentheses): (1) Pound sterling (4.9%) 2038 $ 948 $ 955 Japanese yen (0.5%) 2024–2028 1,167 1,251 Other (13.2%) 2024–2026 193 241 $ 60,010 $ 57,099 Finance lease obligations (4.8%) 2024–2034 705 499 $ 60,715 $ 57,598 Less: net unamortized discount 847 838 Less: net unamortized debt issuance costs 174 154 Add: fair value adjustment (2) (191) (60) $ 59,502 $ 56,546 Less: current maturities 5,469 6,425 Total $ 54,033 $ 50,121 (1) Includes notes, debentures, bank loans and secured borrowings. (2) The portion of the company’s fixed-rate debt obligations that is hedged is reflected in the Consolidated Balance Sheet as an amount equal to the sum of the debt’s carrying value and a fair value adjustment representing changes in the fair value of the hedged debt obligations attributable to movements in benchmark interest rates. The company’s indenture governing its debt securities and its various credit facilities each contain significant covenants which obligate the company to promptly pay principal and interest, limit the aggregate amount of secured indebtedness and sale and leaseback transactions to 10 percent of the company’s consolidated net tangible assets, and restrict the company’s ability to merge or consolidate unless certain conditions are met. The credit facilities also include a covenant on the company’s consolidated net interest expense ratio, which cannot be less than 2.20 to 1.0, as well as a cross default provision with respect to other defaulted indebtedness of at least $500 million. The company is in compliance with its debt covenants and provides periodic certifications to its lenders. The failure to comply with its debt covenants could constitute an event of default with respect to the debt to which such provisions apply. If certain events of default were to occur, the principal and interest on the debt to which such event of default applied would become immediately due and payable. On February 5, 2024, IBM International Capital Pte. Ltd (IIC), a wholly owned finance subsidiary of the company, issued $5.5 billion of U.S. dollar fixed rate notes (IIC Notes) in tranches with maturities ranging from 2 to 30 years and coupons ranging from 4.6 to 5.3 percent. These notes are fully and unconditionally guaranteed by the company. IIC is a 100 percent owned finance subsidiary of IBM, as described by the SEC in Rule 13-01(a)(4)(vi) of Regulation S-X, the primary purpose of which is to borrow money to be made available for the benefit of IBM and its affiliates. As such, IIC has no assets or operations, and will have no assets or operations, other than as related to the issuance, administration and repayment of the IIC Notes and any other debt securities that IIC may issue in the future that are fully and unconditionally guaranteed by IBM. No other subsidiary of the company guarantees the IIC Notes. Pre-swap annual contractual obligations of long-term debt outstanding at March 31, 2024, were as follows: (Dollars in millions) Total Remainder of 2024 $ 4,335 2025 5,048 2026 6,241 2027 6,384 2028 3,912 Thereafter 34,794 Total $ 60,715 Interest on Debt (Dollars in millions) For the three months ended March 31: 2024 2023 Cost of financing $ 85 $ 90 Interest expense 432 367 Interest capitalized 2 4 Total interest paid and accrued $ 519 $ 462 Lines of Credit The company has a $2.5 billion Three-Year Credit Agreement and a $7.5 billion Five-Year Credit Agreement (the Credit Agreements) with maturity dates of June 20, 2026 and June 22, 2028, respectively . The Credit Agreements permit the company and its subsidiary borrowers to borrow up to $10 billion on a revolving basis. At March 31, 2024, there were no borrowings by the company, or its subsidiaries, under these credit facilities. |
Commitments
Commitments | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Commitments: The company’s extended lines of credit to third-party entities include unused amounts of $1.8 billion and $1.4 billion at March 31, 2024 and December 31, 2023, respectively. A portion of these amounts was available to the company’s business partners to support their working capital needs. In addition, the company has committed to provide future financing to its clients in connection with client purchase agreements for $1.7 billion and $1.9 billion at March 31, 2024 and December 31, 2023, respectively. The company collectively evaluates the allowance for these arrangements using a provision methodology consistent with the portfolio of the commitments. Refer to note A, “Significant Accounting Policies,” in the company’s 2023 Annual Report for additional information. The allowance for these commitments is recorded in other liabilities in the Consolidated Balance Sheet and was not material at March 31, 2024. The company has applied the guidance requiring a guarantor to disclose certain types of guarantees, even if the likelihood of requiring the guarantor’s performance is remote. The following is a description of arrangements in which the company is the guarantor. The company is a party to a variety of agreements pursuant to which it may be obligated to indemnify the other party with respect to certain matters. Typically, these obligations arise in the context of contracts entered into by the company, under which the company customarily agrees to hold the party harmless against losses arising from a breach of representations and covenants related to such matters as title to the assets sold, certain intellectual property rights, specified environmental matters, third-party performance of nonfinancial contractual obligations and certain income taxes. In each of these circumstances, payment by the company is conditioned on the other party making a claim pursuant to the procedures specified in the particular contract, the procedures of which typically allow the company to challenge the other party’s claims. While indemnification provisions typically do not include a contractual maximum on the company’s payment, the company’s obligations under these agreements may be limited in terms of time and/or nature of claim, and in some instances, the company may have recourse against third parties for certain payments made by the company. It is not possible to predict the maximum potential amount of future payments under these or similar agreements due to the conditional nature of the company’s obligations and the unique facts and circumstances involved in each particular agreement. Historically, payments made by the company under these agreements have not had a material effect on the company’s business, financial condition or results of operations. In addition, the company guarantees certain loans and financial commitments. The maximum potential future payment under these financial guarantees and the fair value of these guarantees recognized in the Consolidated Balance Sheet at March 31, 2024 and December 31, 2023 was not material. Changes in the company’s warranty liability for standard warranties, which are included in other accrued expenses and liabilities and other liabilities in the Consolidated Balance Sheet, and for extended warranty contracts, which are included in deferred income in the Consolidated Balance Sheet, are presented in the following tables. Standard Warranty Liability (Dollars in millions) 2024 2023 Balance at January 1 $ 65 $ 79 Current-period accruals 17 17 Accrual adjustments to reflect actual experience 7 (17) Charges incurred (20) (21) Balance at March 31 $ 69 $ 58 Extended Warranty Liability (Dollars in millions) 2024 2023 Balance at January 1 $ 184 $ 272 Revenue deferred for new extended warranty contracts 5 9 Amortization of deferred revenue (32) (37) Other (1) (3) 1 Balance at March 31 $ 154 $ 244 Current portion $ 94 $ 129 Noncurrent portion $ 60 $ 116 (1) Other primarily consists of foreign currency translation adjustments. The decrease in extended warranty liability is primarily due to the company’s shift to alternative maintenance and support offerings without a warranty element. |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies: As a company with a substantial employee population and with clients in more than 175 countries, IBM is involved, either as plaintiff or defendant, in a variety of ongoing claims, demands, suits, investigations, tax matters and proceedings that arise from time to time in the ordinary course of its business. The company is a leader in the information technology industry and, as such, has been and will continue to be subject to claims challenging its IP rights and associated products and offerings, including claims of copyright and patent infringement and violations of trade secrets and other IP rights. In addition, the company enforces its own IP against infringement, through license negotiations, lawsuits or otherwise. Further, given the rapidly evolving external landscape of cybersecurity, AI, privacy and data protection laws, regulations and threat actors, the company and its clients have been and will continue to be subject to actions or proceedings in various jurisdictions. Also, as is typical for companies of IBM’s scope and scale, the company is party to actions and proceedings in various jurisdictions involving a wide range of labor and employment issues (including matters related to contested employment decisions, country-specific labor and employment laws, and the company’s pension, retirement and other benefit plans), as well as actions with respect to contracts, product liability, cybersecurity, data privacy, securities, foreign operations, competition law and environmental matters. These actions may be commenced by a number of different parties, including competitors, clients, current or former employees, government and regulatory agencies, stockholders and representatives of the locations in which the company does business. Some of the actions to which the company is party may involve particularly complex technical issues, and some actions may raise novel questions under the laws of the various jurisdictions in which these matters arise. The company records a provision with respect to a claim, suit, investigation or proceeding when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Any recorded liabilities, including any changes to such liabilities for the quarter ended March 31, 2024 were not material to the Consolidated Financial Statements. In accordance with the relevant accounting guidance, the company provides disclosures of matters for which the likelihood of material loss is at least reasonably possible. In addition, the company also discloses matters based on its consideration of other matters and qualitative factors, including the experience of other companies in the industry, and investor, customer and employee relations considerations. With respect to certain of the claims, suits, investigations and proceedings discussed herein, the company believes at this time that the likelihood of any material loss is remote, given, for example, the procedural status, court rulings, and/or the strength of the company’s defenses in those matters. With respect to the remaining claims, suits, investigations and proceedings discussed in this note, except as specifically discussed herein, the company is unable to provide estimates of reasonably possible losses or range of losses, including losses in excess of amounts accrued, if any, for the following reasons. Claims, suits, investigations and proceedings are inherently uncertain, and it is not possible to predict the ultimate outcome of these matters. It is the company’s experience that damage amounts claimed in litigation against it are unreliable and unrelated to possible outcomes, and as such are not meaningful indicators of the company’s potential liability. Further, the company is unable to provide such an estimate due to a number of other factors with respect to these claims, suits, investigations and proceedings, including considerations of the procedural status of the matter in question, the presence of complex or novel legal theories, and/or the ongoing discovery and development of information important to the matters. The company reviews claims, suits, investigations and proceedings at least quarterly, and decisions are made with respect to recording or adjusting provisions and disclosing reasonably possible losses or range of losses (individually or in the aggregate), to reflect the impact and status of settlement discussions, discovery, procedural and substantive rulings, reviews by counsel and other information pertinent to a particular matter. Whether any losses, damages or remedies finally determined in any claim, suit, investigation or proceeding could reasonably have a material effect on the company’s business, financial condition, results of operations or cash flows will depend on a number of variables, including: the timing and amount of such losses or damages; the structure and type of any such remedies; the significance of the impact any such losses, damages or remedies may have in the Consolidated Financial Statements; and the unique facts and circumstances of the particular matter that may give rise to additional factors. While the company will continue to defend itself vigorously, it is possible that the company’s business, financial condition, results of operations or cash flows could be affected in any particular period by the resolution of one or more of these matters. The following is a summary of the more significant legal matters involving the company. On June 8, 2021, IBM sued GlobalFoundries U.S. Inc. (GF) in New York State Supreme Court for claims including fraud and breach of contract relating to a long-term strategic relationship between IBM and GF for researching, developing, and manufacturing advanced semiconductor chips for IBM. GF walked away from its obligations and IBM is now suing to recover amounts paid to GF, and other compensatory and punitive damages, totaling more than $1.5 billion. On September 14, 2021, the court ruled on GF’s motion to dismiss. On April 7, 2022, the Appellate Division unanimously reversed the lower court’s dismissal of IBM’s fraud claim. IBM’s claims for breaches of contract, promissory estoppel, and fraud are proceeding. On June 2, 2022, a putative class action lawsuit was filed in the United States District Court for the Southern District of New York alleging that the IBM Pension Plan miscalculated certain joint and survivor annuity pension benefits by using outdated actuarial tables in violation of the Employee Retirement Income Security Act of 1974. IBM, the Plan Administrator Committee, and the IBM Pension Plan are named as defendants. On April 4, 2024, the court dismissed the lawsuit with prejudice. As disclosed in the Kyndryl Form 10 and subsequent Kyndryl public filings, in 2017 BMC Software, Inc. (BMC) filed suit against IBM in the United States District Court for the Southern District of Texas in a dispute involving IBM’s former managed infrastructure services business. On May 30, 2022, the trial court awarded BMC $718 million in direct damages and $718 million in punitive damages, plus interest and fees. IBM appealed and expects a decision soon. IBM does not believe it has any material exposure relating to this litigation. No material liability or related indemnification asset has been recorded by IBM. The company is party to, or otherwise involved in, proceedings brought by U.S. federal or state environmental agencies under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), known as “Superfund,” or laws similar to CERCLA. Such statutes require potentially responsible parties to participate in remediation activities regardless of fault or ownership of sites. The company is also conducting environmental investigations, assessments or remediations at or in the vicinity of several current or former operating sites globally pursuant to permits, administrative orders or agreements with country, state or local environmental agencies, and is involved in lawsuits and claims concerning certain current or former operating sites. The company is also subject to ongoing tax examinations and governmental assessments in various jurisdictions. Along with many other U.S. companies doing business in Brazil, the company is involved in various challenges with Brazilian tax authorities regarding non-income tax assessments and non-income tax litigation matters. The total potential amount related to all these matters for all applicable years is approximately $400 million. The company believes it will prevail on these matters and that this amount is not a meaningful indicator of |
Equity Activity
Equity Activity | 3 Months Ended |
Mar. 31, 2024 | |
Stockholders' Equity Note [Abstract] | |
Equity Activity | Equity Activity: Reclassifications and Taxes Related to Items of Other Comprehensive Income (Dollars in millions) Before Tax Tax (Expense)/ Net of Tax For the three months ended March 31, 2024: Other comprehensive income/(loss): Foreign currency translation adjustments $ 55 $ (154) $ (99) Net changes related to available-for-sale securities: Unrealized gains/(losses) arising during the period $ 0 $ 0 $ 0 Reclassification of (gains)/losses to other (income) and expense — — — Total net changes related to available-for-sale securities $ 0 $ 0 $ 0 Unrealized gains/(losses) on cash flow hedges: Unrealized gains/(losses) arising during the period $ 176 $ (47) $ 129 Reclassification of (gains)/losses to: Cost of services (4) 1 (3) Cost of sales (12) 4 (8) Cost of financing 2 0 1 SG&A expense (3) 1 (2) Other (income) and expense 79 (20) 59 Interest expense 9 (2) 6 Total unrealized gains/(losses) on cash flow hedges $ 246 $ (63) $ 183 Retirement-related benefit plans: (1) Prior service costs/(credits) $ — $ — $ — Net (losses)/gains arising during the period 1 0 0 Curtailments and settlements 2 0 2 Amortization of prior service (credits)/costs (2) 0 (1) Amortization of net (gains)/losses 261 (72) 189 Total retirement-related benefit plans $ 262 $ (72) $ 189 Other comprehensive income/(loss) $ 563 $ (289) $ 273 (1) These accumulated other comprehensive income (AOCI) components are included in the computation of net periodic pension cost. Refer to note 18, “Retirement-Related Benefits,” for additional information. Reclassifications and Taxes Related to Items of Other Comprehensive Income (Dollars in millions) Before Tax Tax (Expense)/ Net of Tax For the three months ended March 31, 2023: Other comprehensive income/(loss): Foreign currency translation adjustments $ (87) $ 56 $ (30) Net changes related to available-for-sale securities: Unrealized gains/(losses) arising during the period $ 15 $ (4) $ 11 Reclassification of (gains)/losses to other (income) and expense — — — Total net changes related to available-for-sale securities $ 15 $ (4) $ 11 Unrealized gains/(losses) on cash flow hedges: Unrealized gains/(losses) arising during the period $ (29) $ 6 $ (23) Reclassification of (gains)/losses to: Cost of services 2 0 2 Cost of sales (14) 4 (10) Cost of financing 5 (1) 4 SG&A expense (10) 3 (7) Other (income) and expense (126) 32 (94) Interest expense 21 (5) 16 Total unrealized gains/(losses) on cash flow hedges $ (151) $ 38 $ (113) Retirement-related benefit plans: (1) Prior service costs/(credits) $ — $ 1 $ 1 Net (losses)/gains arising during the period 2 0 2 Curtailments and settlements (1) 0 (1) Amortization of prior service (credits)/costs (2) 1 (2) Amortization of net (gains)/losses 131 (38) 93 Total retirement-related benefit plans $ 130 $ (38) $ 92 Other comprehensive income/(loss) $ (93) $ 53 $ (40) (1) These AOCI components are included in the computation of net periodic pension cost. Refer to note 18, “Retirement-Related Benefits,” for additional information. Accumulated Other Comprehensive Income/(Loss) (net of tax) (Dollars in millions) Net Unrealized Foreign Currency Translation Adjustments (1) Net Change Net Unrealized Accumulated January 1, 2024 $ (106) $ (3,488) $ (15,165) $ (1) $ (18,761) Other comprehensive income before reclassifications 129 (99) 0 0 30 Amount reclassified from accumulated other comprehensive income 54 — 189 — 243 Total change for the period $ 183 $ (99) $ 189 $ 0 $ 273 March 31, 2024 $ 76 $ (3,588) $ (14,976) $ (1) $ (18,488) (Dollars in millions) Net Unrealized Foreign Currency Translation Adjustments (1) Net Change Net Unrealized Accumulated January 1, 2023 $ (135) $ (3,591) $ (13,013) $ (1) $ (16,740) Other comprehensive income before reclassifications (23) (30) 2 11 (39) Amount reclassified from accumulated other comprehensive income (90) — 90 — 0 Total change for the period $ (113) $ (30) $ 92 $ 11 $ (40) March 31, 2023 $ (248) $ (3,621) $ (12,921) $ 10 $ (16,780) (1) Foreign currency translation adjustments are presented gross except for any associated hedges which are presented net of tax. |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments: The company operates in multiple functional currencies and is a significant lender and borrower in the global markets. In the normal course of business, the company is exposed to the impact of interest rate changes and foreign currency fluctuations, and to a lesser extent equity and commodity price changes and client credit risk. The company limits these risks by following established risk management policies and procedures, including the use of derivatives, and, where cost effective, financing with debt in the currencies in which assets are denominated. For interest rate exposures, derivatives are used to better align rate movements between the interest rates associated with the company’s lease and other financial assets and the interest rates associated with its financing debt. Derivatives are also used to manage the related cost of debt. For foreign currency exposures, derivatives are used to better manage the cash flow volatility arising from foreign exchange rate fluctuations. In the Consolidated Balance Sheet, the company does not offset derivative assets against liabilities in master netting arrangements nor does it offset receivables or payables recognized upon payment or receipt of cash collateral against the fair values of the related derivative instruments. At March 31, 2024 and December 31, 2023, the amount recognized in other accounts receivables for the right to reclaim cash collateral was $68 million and $11 million, respectively. At March 31, 2024, there was no amount recognized in accounts payable for the obligation to return cash collateral. At December 31, 2023, the amount recognized in accounts payable for such obligation was $7 million. The company restricts the use of cash collateral received to rehypothecation, and therefore reports it in restricted cash in the Consolidated Balance Sheet. There was no cash collateral rehypothecated at March 31, 2024. At December 31, 2023, the amount rehypothecated was $7 million. Additionally, if derivative exposures covered by a qualifying master netting agreement had been netted in the Consolidated Balance Sheet at March 31, 2024 and December 31, 2023, the total derivative asset and liability positions each would have been reduced by $194 million and $235 million, respectively. As discussed in note 5, “Acquisitions & Divestitures,” in December 2023, in connection with the announced acquisition of StreamSets and webMethods from Software AG, the company entered into foreign exchange call option contracts (the call options) with a total notional amount of $2.3 billion (€2.13 billion) and a total premium paid of $49 million. The call options are being accounted for as non-hedge derivatives. For the three months ended March 31, 2024, the company recorded an unrealized loss of $50 million in other (income) and expense in the Consolidated Income Statement. At March 31, 2024 and December 31, 2023, the fair value of the call options was $12 million and $62 million respectively, and is included in prepaid expenses and other current assets in the Consolidated Balance Sheet. In its hedging programs, the company may use forward contracts, futures contracts, interest-rate swaps, cross-currency swaps, equity swaps, and options depending upon the underlying exposure. The company is not a party to leveraged derivative instruments. A brief description of the major hedging programs, categorized by underlying risk, follows. Interest Rate Risk Fixed and Variable Rate Borrowings The company issues debt in the global capital markets to fund its operations and financing business. Access to cost-effective financing can result in interest rate mismatches with the underlying assets. To manage these mismatches and to reduce overall interest cost, the company may use interest-rate swaps to convert specific fixed-rate debt issuances into variable-rate debt (i.e., fair value hedges) and to convert specific variable-rate debt issuances into fixed-rate debt (i.e., cash flow hedges). At March 31, 2024 and December 31, 2023, the total notional amount of the company’s interest-rate swaps was $6.7 billion. The weighted-average remaining maturity of these instruments at March 31, 2024 and December 31, 2023 was approximately 5.2 years and 5.5 years, respectively. These interest-rate contracts were accounted for as fair value hedges. The company did not have any cash flow hedges relating to this program outstanding at March 31, 2024 and December 31, 2023. Forecasted Debt Issuance The company is exposed to interest rate volatility on future debt issuances. To manage this risk, the company may use instruments such as forward starting interest-rate swaps to lock in the rate on the interest payments related to the forecasted debt issuances. There were no instruments outstanding at March 31, 2024 and December 31, 2023. In connection with cash flow hedges of forecasted interest payments related to the company's borrowings, the company recorded net losses (before taxes) of $117 million and $121 million at March 31, 2024 and December 31, 2023, respectively, in AOCI. The company estimates that $14 million of the deferred net losses (before taxes) on derivatives in AOCI at March 31, 2024 will be reclassified to net income within the next 12 months, providing an offsetting economic impact against the underlying interest payments. Foreign Exchange Risk Long-Term Investments in Foreign Subsidiaries (Net Investment) A large portion of the company’s foreign currency denominated debt portfolio is designated as a hedge of net investment in foreign subsidiaries to reduce the volatility in stockholders’ equity caused by changes in foreign currency exchange rates in the functional currency of major foreign subsidiaries with respect to the U.S. dollar. At March 31, 2024 and December 31, 2023, the carrying value of debt designated as hedging instruments was $15.5 billion and $15.9 billion, respectively. The company also uses foreign currency derivatives for this risk management purpose. At March 31, 2024 and December 31, 2023, the total notional amount of derivative instruments designated as net investment hedges was $5.8 billion and $4.9 billion, respectively. At March 31, 2024 and December 31, 2023, the weighted-average remaining maturity of these instruments was approximately 0.2 years and 0.1 years, respectively. Anticipated Royalties and Cost Transactions The company’s operations generate significant nonfunctional currency, third-party vendor payments and intercompany payments for royalties and goods and services among the company’s non-U.S. subsidiaries and with the company. In anticipation of these foreign currency cash flows and in view of the volatility of the currency markets, the company selectively employs foreign exchange forward contracts to manage its currency risk. These forward contracts are accounted for as cash flow hedges. At March 31, 2024, the maximum remaining length of time over which the company hedged its exposure is approximately two years. At March 31, 2024 and December 31, 2023, the total notional amount of forward contracts designated as cash flow hedges of forecasted royalty and cost transactions was $9.6 billion and $9.2 billion, respectively. At both March 31, 2024 and December 31, 2023, the weighted-average remaining maturity of these instruments was approximately 0.6 years. At March 31, 2024 and December 31, 2023, in connection with cash flow hedges of anticipated royalties and cost transactions, the company recorded net gains (before taxes) of $248 million and $40 million, respectively, in AOCI. The company estimates that $186 million of deferred net gains (before taxes) on derivatives in AOCI at March 31, 2024 will be reclassified to net income within the next 12 months, providing an offsetting economic impact against the underlying anticipated transactions. Foreign Currency Denominated Borrowings The company is exposed to exchange rate volatility on foreign currency denominated debt. To manage this risk, the company may employ forward contracts or cross-currency swaps to convert the principal, or principal and interest payments of foreign currency denominated debt to debt denominated in the functional currency of the borrowing entity. These derivatives are accounted for as cash flow hedges. At March 31, 2024, the maximum length of time remaining over which the company hedged its exposure was approximately seven years. At both March 31, 2024 and December 31, 2023, the total notional amount of derivative instruments designated as cash flow hedges of foreign-currency denominated debt was $5.2 billion. At March 31, 2024 and December 31, 2023, in connection with previously terminated cross-currency swaps, the company recorded net losses (before taxes) of $62 million and $68 million, respectively, in AOCI, of which $21 million of deferred net losses (before taxes) is estimated to be reclassified to net income within the next 12 months. At March 31, 2024 and December 31, 2023, in connection with forward contracts, the company has recorded net gains (before taxes) of $51 million and $23 million, respectively, in AOCI. Approximately $62 million of losses (before taxes) related to the initial forward points excluded from the assessment of hedge effectiveness is expected to be amortized to other (income) and expenses within the next 12 months. Subsidiary Cash and Foreign Currency Asset/Liability Management The company uses its Global Treasury Centers to manage the cash of its subsidiaries. These centers principally use currency swaps to convert cash flows in a cost-effective manner. In addition, the company uses forward contracts to economically hedge, on a net basis, the foreign currency exposure of a portion of the company’s nonfunctional currency assets and liabilities. The terms of these forward and swap contracts are generally less than one year. The changes in the fair values of these contracts and of the underlying hedged exposures are generally offsetting and are recorded in other (income) and expense in the Consolidated Income Statement. At March 31, 2024 and December 31, 2023, the total notional amount of derivative instruments in economic hedges of foreign currency exposure was $7.3 billion and $6.7 billion, respectively. Equity Risk Management The company is exposed to market price changes in certain broad market indices and in the company’s own stock primarily related to certain obligations to employees. Changes in the overall value of these employee compensation obligations are recorded in SG&A expense in the Consolidated Income Statement. Although not designated as accounting hedges, the company utilizes derivatives, including equity swaps and futures, to economically hedge the exposures related to its employee compensation obligations. The derivatives are linked to the total return on certain broad market indices or the total return on the company’s common stock, and are recorded at fair value with gains or losses also reported in SG&A expense in the Consolidated Income Statement. At March 31, 2024 and December 31, 2023, the total notional amount of derivative instruments in economic hedges of these compensation obligations was $1.3 billion and $1.2 billion, respectively. Cumulative Basis Adjustments for Fair Value Hedges At March 31, 2024 and December 31, 2023, the following amounts were recorded in the Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges: (Dollars in millions) March 31, December 31, Short-term debt: Carrying amount of the hedged item $ — $ (1) Cumulative hedging adjustments included in the carrying amount — assets/(liabilities) (1) $ — $ (1) Long-term debt: Carrying amount of the hedged item $ (6,499) $ (6,629) Cumulative hedging adjustments included in the carrying amount — assets/(liabilities) (1) $ 191 $ 61 (1) Includes ($188) million and ($200) million of hedging adjustments on discontinued hedging relationships at March 31, 2024 and December 31, 2023, respectively. The Effect of Derivative Instruments in the Consolidated Income Statement The total amounts of income and expense line items presented in the Consolidated Income Statement in which the effects of fair value hedges, cash flow hedges, net investment hedges and derivatives not designated as hedging instruments are recorded and the total effect of hedge activity on these income and expense line items are as follows: (Dollars in millions) Total Gains/(Losses) of For the three months ended March 31: 2024 2023 2024 2023 Cost of services $ 5,239 $ 5,310 $ 4 $ (2) Cost of sales $ 1,381 $ 1,322 $ 12 $ 14 Cost of financing $ 99 $ 110 $ (3) $ (3) SG&A expense $ 4,974 $ 4,853 $ 74 $ 59 Other (income) and expense $ (317) $ (245) $ (287) $ 142 Interest expense $ 432 $ 367 $ (15) $ (14) Gain (Loss) Recognized in Consolidated Income Statement (Dollars in millions) Consolidated Recognized on Attributable to Risk Being Hedged (2) For the three months ended March 31: 2024 2023 2024 2023 Derivative instruments in fair value hedges: (1) Interest rate contracts Cost of financing $ (27) $ 13 $ 22 $ (17) Interest expense (138) 53 110 (68) Derivative instruments not designated as hedging instruments: Foreign exchange contracts Other (income) and expense (207) 16 N/A N/A Equity contracts SG&A expense 71 49 N/A N/A Total $ (302) $ 131 $ 131 $ (84) Gain (Loss) Recognized in Consolidated Income Statement and Other Comprehensive Income Recognized in OCI Consolidated Reclassified Amounts Excluded from Effectiveness Testing (3) (Dollars in millions) For the three months ended March 31: 2024 2023 2024 2023 2024 2023 Derivative instruments in cash flow hedges: Interest rate contracts $ — $ — Cost of financing $ (1) $ (1) $ — $ — Interest expense (4) (3) — — Foreign exchange contracts Cost of services 4 (2) — — Amount included in the assessment of effectiveness 166 (29) Cost of sales 12 14 — — Amount excluded from the assessment of effectiveness 10 — Cost of financing (1) (4) — — SG&A expense 3 10 — — Other (income) and expense (61) 126 (18) — Interest expense (5) (17) — — Instruments in net investment hedges: (4) Foreign exchange contracts 612 (224) Cost of financing — — 4 5 Interest expense — — 22 22 Total $ 787 $ (253) $ (52) $ 122 $ 8 $ 28 (1) The amount includes changes in clean fair values of the derivative instruments in fair value hedging relationships and the periodic accrual for coupon payments required under these derivative contracts. (2) The amount includes basis adjustments to the carrying value of the hedged item recorded during the period and amortization of basis adjustments recorded on de-designated hedging relationships during the period. (3) The company’s policy is to recognize all fair value changes in amounts excluded from effectiveness testing for net investment hedges in net income each period. For cash flow hedges of foreign currency denominated debt, the amounts excluded from effectiveness testing are amortized to net income over the life of the hedging instrument. (4) Instruments in net investment hedges include derivative and non-derivative instruments with the amounts recognized in OCI providing an offset to the translation of foreign subsidiaries. N/A - not applicable For the three months ending March 31, 2024 and 2023, there were no material gains or losses excluded from the assessment of hedge effectiveness (for fair value or cash flow hedges), or associated with an underlying exposure that did not or was not expected to occur (for cash flow hedges); nor are there any anticipated in the normal course of business. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation: Stock-based compensation cost for stock awards and stock options is measured at grant date, based on the fair value of the award, and is recognized over the employee requisite service period. The following table presents total stock-based compensation cost included in income from continuing operations. (Dollars in millions) For the three months ended March 31: 2024 2023 Cost $ 56 $ 46 Selling, general and administrative 171 149 Research, development and engineering 93 74 Pre-tax stock-based compensation cost $ 320 $ 268 Income tax benefits (120) (67) Total net stock-based compensation cost $ 200 $ 201 Pre-tax stock-based compensation cost for the three months ended March 31, 2024 increased $52 million compared to the corresponding period in the prior year due to increases in restricted stock units ($28 million), performance share units ($15 million) and stock options ($8 million). The increases are driven by stock-based compensation awards granted by the company as part of its annual cycles for executives and other employees. |
Retirement-Related Benefits
Retirement-Related Benefits | 3 Months Ended |
Mar. 31, 2024 | |
Retirement Benefits [Abstract] | |
Retirement-Related Benefits | Retirement-Related Benefits: The company offers defined benefit (DB) pension plans, defined contribution plans, as well as nonpension postretirement plans primarily consisting of retiree medical benefits. IBM U.S. Retirement Plan Changes Effective January 1, 2024, IBM changed how it provides certain retirement-related benefits in the U.S. IBM is providing a new benefit to most U.S. employees under its existing U.S. Qualified Personal Pension Plan (Qualified PPP) called the Retirement Benefit Account (RBA). This is in place of any IBM contributions to the U.S. employees' 401(k) Plus accounts. IBM U.S. regular full-time and part-time employees with at least one year of service will participate in the RBA. Each eligible employee's RBA is credited monthly with an amount equal to five percent of their eligible pay with no employee contribution required. Under the RBA, eligible employees earn six percent interest through 2026 and starting in 2027, will earn interest equal to the 10-year U.S. Treasury Yield, subject to a three percent minimum per year through 2033. Eligible employees also received a salary increase effective January 1, 2024 for the difference between the IBM 401(k) Plus contribution percent they were previously entitled to receive and the five percent RBA pay credit. Since the RBA is a component of the Qualified PPP, it is funded by the trust for the Qualified PPP along with all other benefits in the Qualified PPP. As a result of this change, inactive pension plan participants no longer represent substantially all of the participants in the Qualified PPP. As required by U.S. GAAP, this changed the amortization period of unrecognized actuarial losses from the average remaining life expectancy of inactive plan participants to the average remaining service period of active plan participants in 2024. Recognized actuarial losses for the U.S. Plans increased by approximately $100 million for the three months ended March 31, 2024 as compared to the prior-year period, primarily driven by the change in amortization period. There was no impact to funded status, retiree benefit payments or funding requirements of the Qualified PPP due to the change in amortization period. The following table provides the pre-tax cost for all retirement-related plans. Yr. to Yr. (Dollars in millions) Percent For the three months ended March 31: 2024 2023 Change Retirement-related plans — cost: Defined benefit pension and defined contribution plans — cost $ 323 $ 281 14.8 % Nonpension postretirement plans — cost 30 32 (6.0) Total $ 353 $ 314 12.7 % Cost/(Income) of Retirement Plans The following table provides the components of the cost/(income) for the company’s retirement- related benefit plans. (Dollars in millions) U.S. Plans Non-U.S. Plans For the three months ended March 31: 2024 2023 2024 2023 Service cost (1) $ 98 $ — $ 44 $ 44 Interest cost (2) 254 272 267 288 Expected return on plan assets (2) (340) (382) (389) (356) Amortization of prior service costs/(credits) (2) — — 5 5 Recognized actuarial losses (2) 129 27 130 102 Curtailments and settlements (2) — — 2 (1) Multi-employer plans — — 4 4 Other costs/(credits) (2) — — 8 9 Total net periodic pension (income)/cost of defined benefit plans $ 140 $ (82) $ 72 $ 95 Cost of defined contribution plans 12 172 99 97 Total defined benefit pension and defined contribution plans cost recognized in the Consolidated Income Statement $ 152 $ 90 $ 171 $ 192 (1) Increase in U.S. Plans service cost in 2024 is due to the Qualified PPP plan changes described above. (2) These components of net periodic pension cost are included in other (income) and expense in the Consolidated Income Statement. Cost of Nonpension Postretirement Plans The following table provides the components of the cost for the company’s nonpension postretirement plans. (Dollars in millions) U.S. Plan Non-U.S. Plans For the three months ended March 31: 2024 2023 2024 2023 Service cost $ 1 $ 1 $ 1 $ 1 Interest cost (1) 27 29 11 9 Expected return on plan assets (1) — — 0 (1) Amortization of prior service costs/(credits) (1) (7) (7) 0 0 Recognized actuarial losses (1) — — 0 0 Curtailments and settlements (1) — — — — Total nonpension postretirement plans cost recognized in the Consolidated Income Statement $ 20 $ 23 $ 11 $ 9 (1) These components of net periodic pension cost are included in other (income) and expense in the Consolidated Income Statement. Plan Contributions The company does not anticipate any significant changes to the expected plan contributions in 2024 from the amounts disclosed in the 2023 Annual Report. The table below includes contributions to the following plans: (Dollars in millions) Plan Contributions For the three months ended March 31: 2024 2023 U.S. nonpension postretirement benefit plans $ 89 $ 109 Non-U.S. DB and multi-employer plans (1) 14 7 Total plan contributions $ 103 $ 117 (1) Amounts reported net of refunds. During the three months ended March 31, 2024 and 2023, the company contributed $89 million and $109 million of U.S. Treasury Securities, respectively, to the U.S. nonpension postretirement benefit plan. Additionally, during the three months ended March 31, 2024 and 2023, the company contributed $210 million and $192 million of U.S. Treasury securities, respectively, to the Active Medical Trust. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events : On April 30, 2024, the company announced that the Board of Directors approved an increase in the quarterly dividend to $1.67 per common share. The dividend is payable June 10, 2024 to stockholders of record on May 10, 2024. |
Accounting Changes (Policies)
Accounting Changes (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Changes and Error Corrections [Abstract] | |
Basis of Presentation | The accompanying Consolidated Financial Statements and footnotes of the International Business Machines Corporation (IBM or the company) have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The financial statements and footnotes are unaudited. In the opinion of the company’s management, these statements include all adjustments, which are only of a normal recurring nature, necessary to present a fair statement of the company’s results of operations, financial position and cash flows. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amount of assets, liabilities, revenue, costs, expenses and other comprehensive income/(loss) that are reported in the Consolidated Financial Statements and accompanying disclosures. These estimates are based on management’s best knowledge of current events, historical experience, actions that the company may undertake in the future and on various other assumptions that are believed to be reasonable under the circumstances. As a result, actual results may be different from these estimates. In the first quarter of 2024, the company made changes to its organizational structure and management system to better align its portfolio to the market, increase transparency and improve segment comparability to peers. These changes did not impact the company's Consolidated Financial Statements, but did impact its reportable segments. Refer to note 4, "Segments," for additional information on the company's reportable segments. The segments are reported on a comparable basis for all periods. For the three months ended March 31, 2024, the company reported a benefit from income taxes of $502 million and its effective tax rate was (46.7) percent. The rate was primarily driven by the resolution of certain tax audit matters. For the three months ended March 31, 2023, the company reported a provision for income taxes of $124 million and its effective tax rate was 11.7 percent. Noncontrolling interest amounts, included as a reduction within other (income) and expense in the Consolidated Income Statement, were not material to the consolidated results for the periods presented. The company has supplier finance programs with third-party financial institutions where the company agrees to pay the financial institutions the stated amounts of invoices from participating suppliers on the originally invoiced maturity date, which have an average term of 90 to 120 days, consistent with the company's standard payment terms. The financial institutions offer earlier payment of the invoices at the sole discretion of the supplier for a discounted amount. The company does not provide secured legal assets or other forms of guarantees under the arrangements. The company is not a party to the arrangements between its suppliers and the financial institutions. These obligations are recognized as accounts payable in the Consolidated Balance Sheet. The obligations outstanding under these programs at March 31, 2024 and December 31, 2023 were $113 million and $101 million, respectively. Interim results are not necessarily indicative of financial results for a full year. The information included in this Form 10-Q should be read in conjunction with the company’s 2023 Annual Report. Within the financial statements and tables presented, certain columns and rows may not add due to the use of rounded numbers for disclosure purposes. Percentages presented are calculated from the underlying whole-dollar amounts. Certain prior-period amounts have been reclassified to conform to the change in current-period presentation. This is annotated where applicable. |
New Standards to be Implemented and Standards Implemented | New Standards to be Implemented Income Tax Disclosures Standard/Description –Issuance date: December 2023. This guidance requires disaggregated disclosure of the tax rate reconciliation into eight categories, with further disaggregation required for items greater than a specific threshold. Additionally, the guidance requires the disclosure of income taxes paid disaggregated by federal, state and foreign jurisdictions. Effective Date and Adoption Considerations –The guidance is effective January 1, 2025 and early adoption is permitted. The company expects to adopt the guidance as of the effective date. Effect on Financial Statements or Other Significant Matters –As the guidance is a change to disclosures only, it will impact the “Taxes” note within the company's annual financial statements but will not impact the consolidated financial results. Segment Reporting Disclosures Standard/Description –Issuance date: November 2023. This guidance requires the disclosure of significant segment expenses that are regularly provided to a company's chief operating decision maker and included within each reported measure of segment profit or loss. The company must also disclose “other segment items,” which is the difference between segment revenue less significant expenses for each reported measure of segment profit or loss, and a description of its composition. This guidance also requires all segment annual disclosures to be provided on an interim basis. Effective Date and Adoption Considerations –The guidance is effective for annual periods beginning in 2024, and for interim periods beginning January 1, 2025, and is required to be applied on a retrospective basis to all prior periods presented. Early adoption is permitted. The company will adopt the guidance as of the effective date. Effect on Financial Statements or Other Significant Matters –As the guidance is a change to disclosures only, it will impact the “Segments” note within the company's quarterly and annual financial statements but will not have an impact in the consolidated financial results. Standards Implemented Disclosures of Supplier Finance Program Obligations Standard/Description– Issuance date: September 2022. This guidance requires an entity to provide certain interim and annual disclosures about the use of supplier finance programs in connection with the purchase of goods or services. Effective Date and Adoption Considerations– The guidance was effective January 1, 2023 with certain annual disclosures required beginning in 2024 and early adoption was permitted. The company adopted the guidance as of the effective date. Effect on Financial Statements or Other Significant Matters– The guidance did not have a material impact in the consolidated financial results. Refer to note 1, "Basis of Presentation," for additional information. |
Remaining Performance Obligations | Remaining Performance Obligations |
Segments | In the first quarter of 2024, the company made changes to its organization structure and management system to better align its portfolio with the market, increase transparency and improve segment comparability to peers. These changes did not impact the company's Consolidated Financial Statements, but did impact its reportable segments. Due to the removal of certain components of segment profitability, as described below, the company also updated the title of its segment performance metric from pre-tax income from continuing operations to segment profit. The following table displays the segment updates: Reportable Segment Change Resulting Segment Implications The Weather Company asset divestiture - Software Segment + Other-divested businesses Security Services realignment - Software Segment + Consulting Segment Removal of stock-based compensation and net interest allocations from segment profitability - Software Segment, Consulting Segment, Infrastructure Segment, Financing Segment (1) + Other (1) Presentation of interest for the Financing Segment did not change. The following tables reflect the results of continuing operations of the company’s segments consistent with the management and measurement system utilized within the company and have been recast for the prior-year periods to reflect the company's segment changes described above. These results are used by the chief operating decision maker, both in evaluating the performance of, and in allocating resources to, each of the segments. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The company classifies certain assets and liabilities based on the following fair value hierarchy: • Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that can be accessed at the measurement date; • Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and • Level 3 – Unobservable inputs for the asset or liability. When available, the company uses unadjusted quoted market prices in active markets to measure the fair value and classifies such items as Level 1. If quoted market prices are not available, fair value is based upon internally developed models that use current market-based or independently sourced market parameters such as interest rates and currency rates. Items valued using internally generated models are classified according to the lowest level input or value driver that is significant to the valuation. The determination of fair value considers various factors including interest rate yield curves and time value underlying the financial instruments. For derivatives and debt securities, the company uses a discounted cash flow analysis using discount rates commensurate with the duration of the instrument. In determining the fair value of financial instruments, the company considers certain market valuation adjustments to the “base valuations” calculated using the methodologies described below for several parameters that market participants would consider in determining fair value: • Counterparty credit risk adjustments are applied to financial instruments, taking into account the actual credit risk of a counterparty as observed in the credit default swap market to determine the true fair value of such an instrument. • Credit risk adjustments are applied to reflect the company’s own credit risk when valuing all liabilities measured at fair value. The methodology is consistent with that applied in developing counterparty credit risk adjustments, but incorporates the company’s own credit risk as observed in the credit default swap market. The company holds investments primarily in time deposits, certificates of deposit, and U.S. government debt that are designated as available-for-sale. The primary objective of the company’s cash and debt investment portfolio is to protect principal by investing in very liquid investment securities with highly rated counterparties. The company’s standard practice is to hold all of its debt security investments classified as available-for-sale until maturity. No impairments for credit losses and no material non-credit impairments were recorded for the three months ended March 31, 2024 and 2023, respectively. Certain non-financial assets such as property, plant and equipment, operating right-of-use assets, goodwill and intangible assets are also subject to nonrecurring fair value measurements if they are deemed to be impaired. The impairment models used for non-financial assets depend on the type of asset. There were no material impairments of non-financial assets for the three months ended March 31, 2024 and 2023, respectively. |
Financial Assets and Liabilities Not Measured at Fair Value | Financial Assets and Liabilities Not Measured at Fair Value Short-Term Receivables and Payables Short-term receivables (excluding the current portion of long-term receivables) and other investments are financial assets with carrying values that approximate fair value. Accounts payable, other accrued expenses and short-term debt (excluding the current portion of long-term debt) are financial liabilities with carrying values that approximate fair value. If measured at fair value in the financial statements, these financial instruments would be classified as Level 3 in the fair value hierarchy, except for short-term debt which would be classified as Level 2. Loans and Long-Term Receivables Fair values are based on discounted future cash flows using current interest rates offered for similar loans to clients with similar credit ratings for the same remaining maturities. At March 31, 2024 and December 31, 2023, the difference between the carrying amount and estimated fair value for loans and long-term receivables was immaterial. If measured at fair value in the financial statements, these financial instruments would be classified as Level 3 in the fair value hierarchy. Long-Term Debt Fair value of publicly traded long-term debt is based on quoted market prices for the identical liability when traded as an asset in an active market. For other long-term debt (including long-term finance lease liabilities) for which a quoted market price is not available, an expected present value technique that uses rates currently available to the company for debt with similar terms and remaining maturities is used to estimate fair value. The carrying amount of long-term debt was $54,033 million and $50,121 million, and the estimated fair value was $51,656 million and $48,284 million at March 31, 2024 and December 31, 2023, respectively. If measured at fair value in the financial statements, long-term debt (including the current portion) would be classified as Level 2 in the fair value hierarchy. |
Financing Receivables | Financing receivables primarily consist of client loan and installment payment receivables (loans), investment in sales-type and direct financing leases (collectively referred to as client financing receivables) and commercial financing receivables. Loans are provided primarily to clients to finance the purchase of IBM hardware, software and services. Payment terms on these financing arrangements are for terms generally up to seven years. Investment in sales-type and direct financing leases relate principally to the company’s Infrastructure products and are for terms generally up to five years. Commercial financing receivables, which consist of both held-for-investment and held-for-sale receivables, relate primarily to working capital financing for business partners and distributors of IBM products and services. Payment terms for working capital financing generally range from 30 to 60 days. When determining the allowances, financing receivables are evaluated either on an individual or a collective basis. For the company’s policy on determining allowances for credit losses, refer to note A, “Significant Accounting Policies,” in the company’s 2023 Annual Report. |
Commitments | The company collectively evaluates the allowance for these arrangements using a provision methodology consistent with the portfolio of the commitments. Refer to note A, “Significant Accounting Policies,” in the company’s 2023 Annual Report for additional information.The company has applied the guidance requiring a guarantor to disclose certain types of guarantees, even if the likelihood of requiring the guarantor’s performance is remote. |
Contingencies | The company records a provision with respect to a claim, suit, investigation or proceeding when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Any recorded liabilities, including any changes to such liabilities for the quarter ended March 31, 2024 were not material to the Consolidated Financial Statements. In accordance with the relevant accounting guidance, the company provides disclosures of matters for which the likelihood of material loss is at least reasonably possible. In addition, the company also discloses matters based on its consideration of other matters and qualitative factors, including the experience of other companies in the industry, and investor, customer and employee relations considerations. With respect to certain of the claims, suits, investigations and proceedings discussed herein, the company believes at this time that the likelihood of any material loss is remote, given, for example, the procedural status, court rulings, and/or the strength of the company’s defenses in those matters. With respect to the remaining claims, suits, investigations and proceedings discussed in this note, except as specifically discussed herein, the company is unable to provide estimates of reasonably possible losses or range of losses, including losses in excess of amounts accrued, if any, for the following reasons. Claims, suits, investigations and proceedings are inherently uncertain, and it is not possible to predict the ultimate outcome of these matters. It is the company’s experience that damage amounts claimed in litigation against it are unreliable and unrelated to possible outcomes, and as such are not meaningful indicators of the company’s potential liability. Further, the company is unable to provide such an estimate due to a number of other factors with respect to these claims, suits, investigations and proceedings, including considerations of the procedural status of the matter in question, the presence of complex or novel legal theories, and/or the ongoing discovery and development of information important to the matters. The company reviews claims, suits, investigations and proceedings at least quarterly, and decisions are made with respect to recording or adjusting provisions and disclosing reasonably possible losses or range of losses (individually or in the aggregate), to reflect the impact and status of settlement discussions, discovery, procedural and substantive rulings, reviews by counsel and other information pertinent to a particular matter. |
Derivative Financial Instruments | The company operates in multiple functional currencies and is a significant lender and borrower in the global markets. In the normal course of business, the company is exposed to the impact of interest rate changes and foreign currency fluctuations, and to a lesser extent equity and commodity price changes and client credit risk. The company limits these risks by following established risk management policies and procedures, including the use of derivatives, and, where cost effective, financing with debt in the currencies in which assets are denominated. For interest rate exposures, derivatives are used to better align rate movements between the interest rates associated with the company’s lease and other financial assets and the interest rates associated with its financing debt. Derivatives are also used to manage the related cost of debt. For foreign currency exposures, derivatives are used to better manage the cash flow volatility arising from foreign exchange rate fluctuations. |
Offsetting Derivatives | In the Consolidated Balance Sheet, the company does not offset derivative assets against liabilities in master netting arrangements nor does it offset receivables or payables recognized upon payment or receipt of cash collateral against the fair values of the related derivative instruments.The company restricts the use of cash collateral received to rehypothecation, and therefore reports it in restricted cash in the Consolidated Balance Sheet. |
Derivatives, Methods of Accounting, Hedge Effectiveness | The company’s policy is to recognize all fair value changes in amounts excluded from effectiveness testing for net investment hedges in net income each period. For cash flow hedges of foreign currency denominated debt, the amounts excluded from effectiveness testing are amortized to net income over the life of the hedging instrument. |
Stock-Based Compensation | Stock-based compensation cost for stock awards and stock options is measured at grant date, based on the fair value of the award, and is recognized over the employee requisite service period. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenue | The following tables provide details of revenue by major products/service offerings and revenue by geography. Revenue by Major Products/Service Offerings (Dollars in millions) For the three months ended March 31: 2024 2023 (1) Hybrid Platform & Solutions $ 4,098 $ 3,850 Transaction Processing 1,800 1,742 Total Software $ 5,899 $ 5,591 Business Transformation 2,317 2,283 Application Operations 1,938 1,989 Technology Consulting 931 925 Total Consulting $ 5,186 $ 5,197 Hybrid Infrastructure 1,803 1,709 Infrastructure Support 1,273 1,389 Total Infrastructure $ 3,076 $ 3,098 Financing (2) 193 196 Other 108 169 Total revenue $ 14,462 $ 14,252 (1) Recast to reflect segment changes. (2) Contains lease and loan financing arrangements which are not subject to the guidance on revenue from contracts with customers. |
Schedule of disaggregation of revenue by geography | (Dollars in millions) For the three months ended March 31: 2024 2023 Americas $ 7,296 $ 7,078 Europe/Middle East/Africa 4,313 4,331 Asia Pacific 2,853 2,843 Total $ 14,462 $ 14,252 |
Schedule of reconciliation of contract balances | The following table provides information about notes and accounts receivable–trade, contract assets and deferred income balances. (Dollars in millions) At March 31, 2024 At December 31, 2023 Notes and accounts receivable — trade (net of allowances of $152 in 2024 and $192 in 2023) $ 6,041 $ 7,214 Contract assets (1) $ 527 $ 505 Deferred income (current) $ 14,051 $ 13,451 Deferred income (noncurrent) $ 3,488 $ 3,533 (1) Included within prepaid expenses and other current assets in the Consolidated Balance Sheet. |
Schedule of notes and accounts receivable - trade allowance for credit losses | The following table provides roll forwards of the notes and accounts receivable–trade allowance for expected credit losses for the three months ended March 31, 2024 and the year ended December 31, 2023. (Dollars in millions) January 1, 2024 Additions / (Releases) Write-offs (1) Foreign currency and other March 31, 2024 $192 $(8) $(29) $(3) $152 January 1, 2023 Additions / (Releases) Write-offs (1) Foreign currency and other December 31, 2023 $233 $32 $(79) $6 $192 (1) The majority of the write-offs during the period related to receivables which had been previously reserved. |
Segments (Tables)
Segments (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Schedule of segment updates | The following table displays the segment updates: Reportable Segment Change Resulting Segment Implications The Weather Company asset divestiture - Software Segment + Other-divested businesses Security Services realignment - Software Segment + Consulting Segment Removal of stock-based compensation and net interest allocations from segment profitability - Software Segment, Consulting Segment, Infrastructure Segment, Financing Segment (1) + Other (1) Presentation of interest for the Financing Segment did not change. |
Revenue and pre-tax income by segment | The following tables reflect the results of continuing operations of the company’s segments consistent with the management and measurement system utilized within the company and have been recast for the prior-year periods to reflect the company's segment changes described above. These results are used by the chief operating decision maker, both in evaluating the performance of, and in allocating resources to, each of the segments. (Dollars in millions) Software Consulting Infrastructure Financing Total For the three months ended March 31, 2024: Revenue $ 5,899 $ 5,186 $ 3,076 $ 193 $ 14,354 Segment profit $ 1,500 $ 424 $ 311 $ 92 $ 2,327 Revenue year-to-year change 5.5 % (0.2) % (0.7) % (1.6) % 1.9 % Segment profit year-to-year change 8.8 % (0.6) % 1.4 % (8.4) % 5.2 % Segment profit margin 25.4 % 8.2 % 10.1 % 47.7 % 16.2 % For the three months ended March 31, 2023 (1) Revenue $ 5,591 $ 5,197 $ 3,098 $ 196 $ 14,083 Segment profit $ 1,379 $ 427 $ 307 $ 100 $ 2,213 Segment profit margin 24.7 % 8.2 % 9.9 % 51.2 % 15.7 % (1) Recast to reflect segment changes. |
Reconciliation of segment revenue and pre-tax income to IBM as reported | Reconciliations to IBM as Reported: (Dollars in millions) For the three months ended March 31: 2024 2023 (1) Revenue: Total reportable segments $ 14,354 $ 14,083 Other ‒ divested businesses 35 94 Other revenue 73 75 Total revenue from continuing operations $ 14,462 $ 14,252 Pre-tax income from continuing operations: Total reportable segment profit $ 2,327 $ 2,213 Amortization of acquired intangible assets (428) (392) Acquisition-related (charges)/income (2) (60) (3) Non-operating retirement-related (costs)/income (96) 5 Stock-based compensation (320) (268) Net interest excluding the Financing segment (223) (217) Workforce rebalancing charges (374) (259) Other ‒ divested businesses (3) 239 13 Unallocated corporate amounts and other 9 (33) Total pre-tax income from continuing operations $ 1,074 $ 1,058 (1) Recast to reflect segment changes. (2) 2024 includes the impact of foreign exchange call option contracts in connection with the planned acquisition of StreamSets and webMethods from Software AG. Refer to note 16, "Derivative Financial Instruments," for additional information. (3) 2024 includes a gain on the sale of The Weather Company assets. Refer to note 5, "Acquisitions & Divestitures," for additional |
Acquisitions & Divestitures (Ta
Acquisitions & Divestitures (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Business Combination and Asset Acquisition [Abstract] | |
Business acquisition, purchase price allocation | The following table reflects the purchase price related to the first-quarter acquisitions and the resulting purchase price allocation as of March 31, 2024. (Dollars in millions) Amortization All Current assets $ 17 Property, plant and equipment/noncurrent assets 2 Intangible assets: Goodwill N/A 195 Client relationships 2-7 31 Completed technology 7 37 Trademarks 3 0 Total assets acquired $ 284 Current liabilities 13 Noncurrent liabilities 15 Total liabilities assumed $ 29 Total purchase price $ 255 N/A – not applicable |
Other (Income) and Expense (Tab
Other (Income) and Expense (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Other Income and Expenses [Abstract] | |
Schedule of components of other income and expense | Components of other (income) and expense are as follows: (Dollars in millions) For the three months ended March 31: 2024 2023 Other (income) and expense: Foreign currency transaction losses/(gains) (1) $ (205) $ 88 (Gains)/losses on derivative instruments (1) 287 (142) Interest income (210) (170) Net (gains)/losses from securities and investment assets (10) 5 Retirement-related costs/(income) 96 (5) Other (2) (274) (22) Total other (income) and expense $ (317) $ (245) (1) The company uses financial hedging instruments to limit specific currency risks related to foreign currency-based transactions. The hedging program does not hedge 100 percent of currency exposures and defers, versus eliminates, the impact of currency. Refer to note 16, "Derivative Financial Instruments," for additional information on foreign exchange risk. (2) 2024 includes a pre-tax gain of $241 million from the divestiture of The Weather Company assets. Refer to note 5, "Acquisitions & Divestitures," for additional information. |
Earnings Per Share of Common _2
Earnings Per Share of Common Stock (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Computation of basic and diluted earnings/(loss) per share | The following table provides the computation of basic and diluted earnings per share of common stock for the three months ended March 31, 2024 and 2023. (Dollars in millions except per share amounts) For the three months ended March 31: 2024 2023 Number of shares on which basic earnings per share is calculated: Weighted-average shares outstanding during period 917,178,779 907,526,887 Add — Incremental shares under stock-based compensation plans 14,256,390 8,609,239 Add — Incremental shares associated with contingently issuable shares 1,996,144 1,709,153 Number of shares on which diluted earnings per share is calculated 933,431,312 917,845,279 Income from continuing operations $ 1,575 $ 934 Income/(loss) from discontinued operations, net of tax 30 (7) Net income on which basic earnings per share is calculated $ 1,605 $ 927 Income from continuing operations $ 1,575 $ 934 Net income applicable to contingently issuable shares — — Income from continuing operations on which diluted earnings per share is calculated $ 1,575 $ 934 Income/(loss) from discontinued operations, net of tax, on which diluted earnings per share is calculated 30 (7) Net income on which diluted earnings per share is calculated $ 1,605 $ 927 Earnings/(loss) per share of common stock: Assuming dilution Continuing operations $ 1.69 $ 1.02 Discontinued operations 0.03 (0.01) Total $ 1.72 $ 1.01 Basic Continuing operations $ 1.72 $ 1.03 Discontinued operations 0.03 (0.01) Total $ 1.75 $ 1.02 |
Financial Assets & Liabilities
Financial Assets & Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Investments, All Other Investments [Abstract] | |
Financial assets and financial liabilities measured at fair value on a recurring basis | The following table presents the company’s financial assets and financial liabilities that are measured at fair value on a recurring basis at March 31, 2024 and December 31, 2023. Fair Value At March 31, 2024 At December 31, 2023 (Dollars in millions) Assets (6) Liabilities (7) Assets (6) Liabilities (7) Cash equivalents: (1) Time deposits and certificates of deposit (2) 2 $ 7,232 N/A $ 7,206 N/A Money market funds 1 487 N/A 494 N/A Total cash equivalents $ 7,719 N/A $ 7,699 N/A Equity investments 1 7 N/A 25 N/A Debt securities-current (2)(3) 2 4,512 N/A 373 N/A Debt securities-noncurrent (2)(4) 2,3 108 N/A 8 N/A Derivatives designated as hedging instruments: Interest rate contracts 2 — 436 2 299 Foreign exchange contracts 2 263 102 131 275 Derivatives not designated as hedging instruments: Foreign exchange contracts (5) 2 23 25 115 19 Equity contracts 2 55 1 93 — Total $ 12,686 $ 564 $ 8,446 $ 593 (1) Included within cash and cash equivalents in the Consolidated Balance Sheet. (2) Available-for-sale debt securities with carrying values that approximate fair value. (3) Term deposits and U.S. treasury bills that are reported within marketable securities in the Consolidated Balance Sheet. The March 31, 2024 balance includes proceeds from the first quarter 2024 debt issuance. Refer to note 12, “Borrowings,” for additional information. (4) March 31, 2024 includes a $100 million seller financing loan in connection with the divestiture of The Weather Company assets reported within investments and sundry assets in the Consolidated Balance Sheet. Refer to note 5, "Acquisitions & Divestitures," for additional information. (5) Asset amounts include $12 million and $62 million at March 31, 2024 and December 31, 2023, respectively, related to foreign exchange call option contracts in connection with the planned acquisition of StreamSets and webMethods from Software AG. Refer to note 16, "Derivative Financial Instruments," for additional information. (6) The gross balances of derivative assets contained within prepaid expenses and other current assets, and investments and sundry assets in the Consolidated Balance Sheet at March 31, 2024 were $328 million and $12 million, respectively, and at December 31, 2023 were $304 million and $37 million, respectively. (7) The gross balances of derivative liabilities contained within other accrued expenses and liabilities, and other liabilities in the Consolidated Balance Sheet at March 31, 2024 were $95 million and $469 million, respectively, and at December 31, 2023 were $294 million and $299 million, respectively. N/A – not applicable |
Financing Receivables (Tables)
Financing Receivables (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Receivables [Abstract] | |
Summary of the components of financing receivables | A summary of the components of the company’s financing receivables is presented as follows: Client Financing Receivables Client Loan and Installment Payment Receivables Investment in Sales-Type and Direct Financing Commercial Financing Receivables (Dollars in millions) Held for Held for At March 31, 2024 (Loans) Leases Investment Sale (1) Total Financing receivables, gross $ 5,983 $ 3,949 $ 441 $ 644 $ 11,017 Unearned income (446) (402) — — (848) Unguaranteed residual value — 424 — — 424 Amortized cost $ 5,537 $ 3,971 $ 441 $ 644 $ 10,593 Allowance for credit losses (82) (57) (6) — (145) Total financing receivables, net $ 5,455 $ 3,914 $ 435 $ 644 $ 10,448 Current portion $ 2,949 $ 1,493 $ 435 $ 644 $ 5,521 Noncurrent portion $ 2,506 $ 2,421 $ — $ — $ 4,927 Client Financing Receivables Client Loan and Installment Payment Receivables Investment in Sales-Type and Direct Financing Commercial Financing Receivables (Dollars in millions) Held for Held for At December 31, 2023 (Loans) Leases Investment Sale (1) Total Financing receivables, gross $ 7,060 $ 4,261 $ 1,160 $ 692 $ 13,173 Unearned income (486) (429) — — (915) Unguaranteed residual value — 458 — — 458 Amortized cost $ 6,574 $ 4,290 $ 1,160 $ 692 $ 12,716 Allowance for credit losses (87) (63) (6) — (156) Total financing receivables, net $ 6,486 $ 4,227 $ 1,155 $ 692 $ 12,560 Current portion $ 3,427 $ 1,520 $ 1,155 $ 692 $ 6,793 Noncurrent portion $ 3,059 $ 2,707 $ — $ — $ 5,766 (1) |
Schedule of transfer of commercial financing assets | The following table presents the total amount of commercial financing receivables transferred. (Dollars in millions) For the three months ended March 31: 2024 2023 Commercial financing receivables: Receivables transferred during the period $ 1,802 $ 2,233 Receivables uncollected at end of period (1) $ 655 $ 780 (1) |
Schedule of client financing receivables and allowance for credit losses by class | The following tables present the amortized cost basis for client financing receivables at March 31, 2024 and December 31, 2023, further segmented by three classes: Americas, Europe/Middle East/Africa (EMEA) and Asia Pacific. The commercial financing receivables portfolio segment is excluded from the tables in the sections below as the receivables are short term in nature and the current estimated risk of loss and resulting impact to the company’s financial results are not material. (Dollars in millions) At March 31, 2024: Americas EMEA Asia Pacific Total Amortized cost $ 5,722 $ 2,511 $ 1,275 $ 9,508 Allowance for credit losses: Beginning balance at January 1, 2024 $ 92 $ 48 $ 11 $ 150 Write-offs $ 0 $ 0 $ — $ 0 Recoveries 0 0 0 0 Additions/(releases) (10) 0 1 (10) Other (1) 0 (1) 0 (1) Ending balance at March 31, 2024 $ 82 $ 46 $ 12 $ 139 (1) Primarily represents translation adjustments. (Dollars in millions) At December 31, 2023: Americas EMEA Asia Pacific Total Amortized cost $ 6,488 $ 3,007 $ 1,368 $ 10,863 Allowance for credit losses: Beginning balance at January 1, 2023 $ 88 $ 60 $ 20 $ 168 Write-offs $ (9) $ (1) $ (8) $ (18) Recoveries 0 2 3 5 Additions/(releases) 5 (14) (4) (12) Other (1) 7 1 (1) 8 Ending balance at December 31, 2023 $ 92 $ 48 $ 11 $ 150 (1) Primarily represents translation adjustments. |
Schedule of past due client financing receivables | (Dollars in millions) Total Amortized Cost > 90 Days (1) Amortized Cost > 90 Days and Accruing (1) Billed Amortized Cost Not Accruing (2) At March 31, 2024: Americas $ 5,722 $ 102 $ 33 $ 3 $ 71 EMEA 2,511 41 12 4 30 Asia Pacific 1,275 8 0 0 8 Total client financing receivables $ 9,508 $ 152 $ 45 $ 8 $ 109 (Dollars in millions) Total Amortized Cost > 90 Days (1) Amortized Cost > 90 Days and Accruing (1) Billed Amortized Cost Not Accruing (2) At December 31, 2023: Americas $ 6,488 $ 111 $ 40 $ 6 $ 71 EMEA 3,007 31 1 1 31 Asia Pacific 1,368 9 1 0 8 Total client financing receivables $ 10,863 $ 151 $ 43 $ 7 $ 110 (1) At a contract level, which includes total billed and unbilled amounts for financing receivables aged greater than 90 days. (2) Of the amortized cost not accruing, there was a related allowance of $105 million and $106 million at March 31, 2024 and December 31, 2023, respectively. Financing income recognized on these receivables was immaterial for the three months ended March 31, 2024 and 2023, respectively. |
Schedule of amortized cost by credit quality indicator | The following tables present the amortized cost basis for client financing receivables by credit quality indicator at March 31, 2024 and December 31, 2023, respectively. Receivables with a credit quality indicator ranging from Aaa to Baa3 are considered investment grade. All others are considered non-investment grade. The credit quality indicators reflect mitigating credit enhancement actions taken by customers which reduce the risk to IBM. Gross write-offs by vintage year at March 31, 2024 and December 31, 2023 were not material. (Dollars in millions) Americas EMEA Asia Pacific At March 31, 2024: Aaa – Baa3 Ba1 – C Aaa – Baa3 Ba1 – C Aaa – Baa3 Ba1 – C Vintage year: 2024 $ 241 $ 219 $ 73 $ 108 $ 125 $ 26 2023 1,929 782 552 413 398 57 2022 1,426 216 557 297 349 38 2021 504 61 227 60 83 33 2020 115 54 66 44 74 19 2019 and prior 111 63 56 57 56 17 Total $ 4,327 $ 1,395 $ 1,531 $ 980 $ 1,085 $ 189 (Dollars in millions) Americas EMEA Asia Pacific At December 31, 2023: Aaa – Baa3 Ba1 – C Aaa – Baa3 Ba1 – C Aaa – Baa3 Ba1 – C Vintage year: 2023 $ 2,292 $ 1,028 $ 750 $ 520 $ 501 $ 70 2022 1,645 268 687 374 386 42 2021 655 85 284 83 110 40 2020 205 79 106 60 97 22 2019 104 23 58 38 40 8 2018 and prior 55 50 16 30 39 12 Total $ 4,955 $ 1,533 $ 1,901 $ 1,106 $ 1,174 $ 195 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Schedule of amounts included in the Consolidated Income Statement related to lessor activity | The following table presents amounts included in the Consolidated Income Statement related to lessor activity. (Dollars in millions) For the three months ended March 31: 2024 2023 Lease income — sales-type and direct financing leases: Sales-type lease selling price $ 113 $ 90 Less: Carrying value of underlying assets (1) (28) (30) Gross profit $ 85 $ 61 Interest income on lease receivables 69 59 Total sales-type and direct financing lease income $ 154 $ 119 Lease income — operating leases 18 26 Variable lease income 20 21 Total lease income $ 192 $ 166 (1) Excludes unguaranteed residual value. |
Intangible Assets Including G_2
Intangible Assets Including Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible asset balances by major asset class | The following tables present the company's intangible asset balances by major asset class. At March 31, 2024 (Dollars in millions) Gross Carrying Accumulated Net Carrying Amount (1) Intangible asset class: Capitalized software $ 1,566 $ (663) $ 903 Client relationships 9,014 (3,699) 5,316 Completed technology 5,726 (2,668) 3,059 Patents/trademarks 1,808 (458) 1,350 Other (2) 151 (28) 123 Total $ 18,266 $ (7,516) $ 10,750 At December 31, 2023 (Dollars in millions) Gross Carrying Accumulated Net Carrying Amount (1) Intangible asset class: Capitalized software $ 1,636 $ (762) $ 874 Client relationships 9,053 (3,500) 5,553 Completed technology 5,713 (2,510) 3,203 Patents/trademarks 1,821 (436) 1,385 Other (2) 41 (20) 22 Total $ 18,265 $ (7,229) $ 11,036 (1) Amounts as of March 31, 2024 and December 31, 2023 include a decrease in net intangible asset balances of $57 million and an increase of $50 million, respectively, due to foreign currency translation. (2) Other intangibles are primarily acquired proprietary and non-proprietary technology licenses, data, business processes, methodologies and systems. |
Intangible assets, future amortization expense | The future amortization expense relating to intangible assets currently recorded in the Consolidated Balance Sheet was estimated to be the following at March 31, 2024: (Dollars in millions) Capitalized Acquired Total Remainder of 2024 $ 443 $ 1,321 $ 1,764 2025 310 1,729 2,040 2026 140 1,705 1,845 2027 10 1,686 1,695 2028 — 1,384 1,384 Thereafter — 2,022 2,022 |
Changes in goodwill balances by reportable segment | The changes in the goodwill balances by segment for the three months ended March 31, 2024 and for the year ended December 31, 2023 were as follows: (Dollars in millions) Balance Goodwill Purchase Foreign Currency Translation and Other Adjustments (1) Balance Segment 1/1/2024 Divestitures 3/31/2024 Software $ 46,447 $ 91 $ (4) $ — $ (304) $ 46,230 Consulting 8,883 96 0 — (57) 8,922 Infrastructure 4,384 8 — — (11) 4,381 Other (2) 464 — — (464) — — Total $ 60,178 $ 195 $ (4) $ (464) $ (372) $ 59,534 (Dollars in millions) Balance Goodwill Purchase Foreign Currency Translation and Other Adjustments (1) Balance Segment 1/1/2023 Divestitures 12/31/2023 Software (3) $ 42,712 $ 3,538 $ (17) $ — $ 214 $ 46,447 Consulting (3) 8,409 403 2 — 69 8,883 Infrastructure 4,363 12 — — 8 4,384 Other (3) 464 — — — — 464 Total $ 55,949 $ 3,953 $ (15) $ — $ 291 $ 60,178 (1) Primarily driven by foreign currency translation. (2) The company derecognized goodwill related to the divestiture of The Weather Company assets. Refer to note 5, "Acquisitions & Divestitures," for additional information. (3) Recast to reflect segment changes. |
Borrowings (Tables)
Borrowings (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Pre-Swap Borrowing Balance Balance (Dollars in millions) Maturities 3/31/2024 12/31/2023 U.S. dollar debt (weighted-average interest rate at March 31, 2024): (1) 3.0% 2024 $ 3,002 $ 5,003 5.1% 2025 1,605 1,601 3.7% 2026 5,800 5,201 3.3% 2027 4,119 3,619 5.0% 2028 1,313 1,313 3.6% 2029 3,750 3,250 2.0% 2030 1,350 1,350 4.8% 2031 500 — 4.4% 2032 1,850 1,850 4.8% 2033 750 750 4.9% 2034 1,000 — 8.0% 2038 83 83 4.5% 2039 2,745 2,745 2.9% 2040 650 650 4.0% 2042 1,107 1,107 5.3% 2044 1,000 — 7.0% 2045 27 27 4.7% 2046 650 650 4.3% 2049 3,000 3,000 3.0% 2050 750 750 4.2% 2052 1,400 1,400 5.1% 2053 650 650 5.3% 2054 1,400 — 7.1% 2096 316 316 $ 38,819 $ 35,317 Euro debt (weighted-average interest rate at March 31, 2024): (1) 1.1% 2024 $ 809 $ 829 1.6% 2025 3,237 3,315 2.3% 2027 2,158 2,210 0.7% 2028 1,942 1,989 1.5% 2029 1,079 1,105 0.9% 2030 1,079 1,105 2.7% 2031 2,698 2,762 0.7% 2032 1,726 1,768 1.3% 2034 1,079 1,105 3.8% 2035 1,079 1,105 1.2% 2040 917 939 4.0% 2043 1,079 1,105 $ 18,883 $ 19,335 Other currencies (weighted-average interest rate at March 31, 2024 in parentheses): (1) Pound sterling (4.9%) 2038 $ 948 $ 955 Japanese yen (0.5%) 2024–2028 1,167 1,251 Other (13.2%) 2024–2026 193 241 $ 60,010 $ 57,099 Finance lease obligations (4.8%) 2024–2034 705 499 $ 60,715 $ 57,598 Less: net unamortized discount 847 838 Less: net unamortized debt issuance costs 174 154 Add: fair value adjustment (2) (191) (60) $ 59,502 $ 56,546 Less: current maturities 5,469 6,425 Total $ 54,033 $ 50,121 (1) Includes notes, debentures, bank loans and secured borrowings. (2) The portion of the company’s fixed-rate debt obligations that is hedged is reflected in the Consolidated Balance Sheet as an amount equal to the sum of the debt’s carrying value and a fair value adjustment representing changes in the fair value of the hedged debt obligations attributable to movements in benchmark interest rates. |
Pre-swap annual contractual obligations of long-term debt outstanding | Pre-swap annual contractual obligations of long-term debt outstanding at March 31, 2024, were as follows: (Dollars in millions) Total Remainder of 2024 $ 4,335 2025 5,048 2026 6,241 2027 6,384 2028 3,912 Thereafter 34,794 Total $ 60,715 |
Interest on Debt | (Dollars in millions) For the three months ended March 31: 2024 2023 Cost of financing $ 85 $ 90 Interest expense 432 367 Interest capitalized 2 4 Total interest paid and accrued $ 519 $ 462 |
Commitments (Tables)
Commitments (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Changes in warranty liabilities | Changes in the company’s warranty liability for standard warranties, which are included in other accrued expenses and liabilities and other liabilities in the Consolidated Balance Sheet, and for extended warranty contracts, which are included in deferred income in the Consolidated Balance Sheet, are presented in the following tables. Standard Warranty Liability (Dollars in millions) 2024 2023 Balance at January 1 $ 65 $ 79 Current-period accruals 17 17 Accrual adjustments to reflect actual experience 7 (17) Charges incurred (20) (21) Balance at March 31 $ 69 $ 58 Extended Warranty Liability (Dollars in millions) 2024 2023 Balance at January 1 $ 184 $ 272 Revenue deferred for new extended warranty contracts 5 9 Amortization of deferred revenue (32) (37) Other (1) (3) 1 Balance at March 31 $ 154 $ 244 Current portion $ 94 $ 129 Noncurrent portion $ 60 $ 116 (1) Other primarily consists of foreign currency translation adjustments. |
Equity Activity (Tables)
Equity Activity (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Stockholders' Equity Note [Abstract] | |
Reclassifications and taxes related to items of other comprehensive income | (Dollars in millions) Before Tax Tax (Expense)/ Net of Tax For the three months ended March 31, 2024: Other comprehensive income/(loss): Foreign currency translation adjustments $ 55 $ (154) $ (99) Net changes related to available-for-sale securities: Unrealized gains/(losses) arising during the period $ 0 $ 0 $ 0 Reclassification of (gains)/losses to other (income) and expense — — — Total net changes related to available-for-sale securities $ 0 $ 0 $ 0 Unrealized gains/(losses) on cash flow hedges: Unrealized gains/(losses) arising during the period $ 176 $ (47) $ 129 Reclassification of (gains)/losses to: Cost of services (4) 1 (3) Cost of sales (12) 4 (8) Cost of financing 2 0 1 SG&A expense (3) 1 (2) Other (income) and expense 79 (20) 59 Interest expense 9 (2) 6 Total unrealized gains/(losses) on cash flow hedges $ 246 $ (63) $ 183 Retirement-related benefit plans: (1) Prior service costs/(credits) $ — $ — $ — Net (losses)/gains arising during the period 1 0 0 Curtailments and settlements 2 0 2 Amortization of prior service (credits)/costs (2) 0 (1) Amortization of net (gains)/losses 261 (72) 189 Total retirement-related benefit plans $ 262 $ (72) $ 189 Other comprehensive income/(loss) $ 563 $ (289) $ 273 (1) These accumulated other comprehensive income (AOCI) components are included in the computation of net periodic pension cost. Refer to note 18, “Retirement-Related Benefits,” for additional information. (Dollars in millions) Before Tax Tax (Expense)/ Net of Tax For the three months ended March 31, 2023: Other comprehensive income/(loss): Foreign currency translation adjustments $ (87) $ 56 $ (30) Net changes related to available-for-sale securities: Unrealized gains/(losses) arising during the period $ 15 $ (4) $ 11 Reclassification of (gains)/losses to other (income) and expense — — — Total net changes related to available-for-sale securities $ 15 $ (4) $ 11 Unrealized gains/(losses) on cash flow hedges: Unrealized gains/(losses) arising during the period $ (29) $ 6 $ (23) Reclassification of (gains)/losses to: Cost of services 2 0 2 Cost of sales (14) 4 (10) Cost of financing 5 (1) 4 SG&A expense (10) 3 (7) Other (income) and expense (126) 32 (94) Interest expense 21 (5) 16 Total unrealized gains/(losses) on cash flow hedges $ (151) $ 38 $ (113) Retirement-related benefit plans: (1) Prior service costs/(credits) $ — $ 1 $ 1 Net (losses)/gains arising during the period 2 0 2 Curtailments and settlements (1) 0 (1) Amortization of prior service (credits)/costs (2) 1 (2) Amortization of net (gains)/losses 131 (38) 93 Total retirement-related benefit plans $ 130 $ (38) $ 92 Other comprehensive income/(loss) $ (93) $ 53 $ (40) (1) These AOCI components are included in the computation of net periodic pension cost. Refer to note 18, “Retirement-Related Benefits,” for additional information. |
Accumulated other comprehensive income/(loss) (net of tax) | (Dollars in millions) Net Unrealized Foreign Currency Translation Adjustments (1) Net Change Net Unrealized Accumulated January 1, 2024 $ (106) $ (3,488) $ (15,165) $ (1) $ (18,761) Other comprehensive income before reclassifications 129 (99) 0 0 30 Amount reclassified from accumulated other comprehensive income 54 — 189 — 243 Total change for the period $ 183 $ (99) $ 189 $ 0 $ 273 March 31, 2024 $ 76 $ (3,588) $ (14,976) $ (1) $ (18,488) (Dollars in millions) Net Unrealized Foreign Currency Translation Adjustments (1) Net Change Net Unrealized Accumulated January 1, 2023 $ (135) $ (3,591) $ (13,013) $ (1) $ (16,740) Other comprehensive income before reclassifications (23) (30) 2 11 (39) Amount reclassified from accumulated other comprehensive income (90) — 90 — 0 Total change for the period $ (113) $ (30) $ 92 $ 11 $ (40) March 31, 2023 $ (248) $ (3,621) $ (12,921) $ 10 $ (16,780) (1) Foreign currency translation adjustments are presented gross except for any associated hedges which are presented net of tax. |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Amounts related to cumulative basis adjustments for fair value hedges | At March 31, 2024 and December 31, 2023, the following amounts were recorded in the Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges: (Dollars in millions) March 31, December 31, Short-term debt: Carrying amount of the hedged item $ — $ (1) Cumulative hedging adjustments included in the carrying amount — assets/(liabilities) (1) $ — $ (1) Long-term debt: Carrying amount of the hedged item $ (6,499) $ (6,629) Cumulative hedging adjustments included in the carrying amount — assets/(liabilities) (1) $ 191 $ 61 (1) Includes ($188) million and ($200) million of hedging adjustments on discontinued hedging relationships at March 31, 2024 and December 31, 2023, respectively. |
Effect of derivative instruments in the Consolidated Income Statement | The total amounts of income and expense line items presented in the Consolidated Income Statement in which the effects of fair value hedges, cash flow hedges, net investment hedges and derivatives not designated as hedging instruments are recorded and the total effect of hedge activity on these income and expense line items are as follows: (Dollars in millions) Total Gains/(Losses) of For the three months ended March 31: 2024 2023 2024 2023 Cost of services $ 5,239 $ 5,310 $ 4 $ (2) Cost of sales $ 1,381 $ 1,322 $ 12 $ 14 Cost of financing $ 99 $ 110 $ (3) $ (3) SG&A expense $ 4,974 $ 4,853 $ 74 $ 59 Other (income) and expense $ (317) $ (245) $ (287) $ 142 Interest expense $ 432 $ 367 $ (15) $ (14) Gain (Loss) Recognized in Consolidated Income Statement (Dollars in millions) Consolidated Recognized on Attributable to Risk Being Hedged (2) For the three months ended March 31: 2024 2023 2024 2023 Derivative instruments in fair value hedges: (1) Interest rate contracts Cost of financing $ (27) $ 13 $ 22 $ (17) Interest expense (138) 53 110 (68) Derivative instruments not designated as hedging instruments: Foreign exchange contracts Other (income) and expense (207) 16 N/A N/A Equity contracts SG&A expense 71 49 N/A N/A Total $ (302) $ 131 $ 131 $ (84) Gain (Loss) Recognized in Consolidated Income Statement and Other Comprehensive Income Recognized in OCI Consolidated Reclassified Amounts Excluded from Effectiveness Testing (3) (Dollars in millions) For the three months ended March 31: 2024 2023 2024 2023 2024 2023 Derivative instruments in cash flow hedges: Interest rate contracts $ — $ — Cost of financing $ (1) $ (1) $ — $ — Interest expense (4) (3) — — Foreign exchange contracts Cost of services 4 (2) — — Amount included in the assessment of effectiveness 166 (29) Cost of sales 12 14 — — Amount excluded from the assessment of effectiveness 10 — Cost of financing (1) (4) — — SG&A expense 3 10 — — Other (income) and expense (61) 126 (18) — Interest expense (5) (17) — — Instruments in net investment hedges: (4) Foreign exchange contracts 612 (224) Cost of financing — — 4 5 Interest expense — — 22 22 Total $ 787 $ (253) $ (52) $ 122 $ 8 $ 28 (1) The amount includes changes in clean fair values of the derivative instruments in fair value hedging relationships and the periodic accrual for coupon payments required under these derivative contracts. (2) The amount includes basis adjustments to the carrying value of the hedged item recorded during the period and amortization of basis adjustments recorded on de-designated hedging relationships during the period. (3) The company’s policy is to recognize all fair value changes in amounts excluded from effectiveness testing for net investment hedges in net income each period. For cash flow hedges of foreign currency denominated debt, the amounts excluded from effectiveness testing are amortized to net income over the life of the hedging instrument. (4) Instruments in net investment hedges include derivative and non-derivative instruments with the amounts recognized in OCI providing an offset to the translation of foreign subsidiaries. N/A - not applicable |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-based compensation cost included in income from continuing operations | The following table presents total stock-based compensation cost included in income from continuing operations. (Dollars in millions) For the three months ended March 31: 2024 2023 Cost $ 56 $ 46 Selling, general and administrative 171 149 Research, development and engineering 93 74 Pre-tax stock-based compensation cost $ 320 $ 268 Income tax benefits (120) (67) Total net stock-based compensation cost $ 200 $ 201 |
Retirement-Related Benefits (Ta
Retirement-Related Benefits (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Retirement Benefits [Abstract] | |
Pre-tax cost for all retirement-related plans | The following table provides the pre-tax cost for all retirement-related plans. Yr. to Yr. (Dollars in millions) Percent For the three months ended March 31: 2024 2023 Change Retirement-related plans — cost: Defined benefit pension and defined contribution plans — cost $ 323 $ 281 14.8 % Nonpension postretirement plans — cost 30 32 (6.0) Total $ 353 $ 314 12.7 % |
Components of net periodic (income)/cost of the company's retirement-related benefit plans | The following table provides the components of the cost/(income) for the company’s retirement- related benefit plans. (Dollars in millions) U.S. Plans Non-U.S. Plans For the three months ended March 31: 2024 2023 2024 2023 Service cost (1) $ 98 $ — $ 44 $ 44 Interest cost (2) 254 272 267 288 Expected return on plan assets (2) (340) (382) (389) (356) Amortization of prior service costs/(credits) (2) — — 5 5 Recognized actuarial losses (2) 129 27 130 102 Curtailments and settlements (2) — — 2 (1) Multi-employer plans — — 4 4 Other costs/(credits) (2) — — 8 9 Total net periodic pension (income)/cost of defined benefit plans $ 140 $ (82) $ 72 $ 95 Cost of defined contribution plans 12 172 99 97 Total defined benefit pension and defined contribution plans cost recognized in the Consolidated Income Statement $ 152 $ 90 $ 171 $ 192 (1) Increase in U.S. Plans service cost in 2024 is due to the Qualified PPP plan changes described above. (2) These components of net periodic pension cost are included in other (income) and expense in the Consolidated Income Statement. |
Components of the cost/(income) for the company's nonpension postretirement plans | The following table provides the components of the cost for the company’s nonpension postretirement plans. (Dollars in millions) U.S. Plan Non-U.S. Plans For the three months ended March 31: 2024 2023 2024 2023 Service cost $ 1 $ 1 $ 1 $ 1 Interest cost (1) 27 29 11 9 Expected return on plan assets (1) — — 0 (1) Amortization of prior service costs/(credits) (1) (7) (7) 0 0 Recognized actuarial losses (1) — — 0 0 Curtailments and settlements (1) — — — — Total nonpension postretirement plans cost recognized in the Consolidated Income Statement $ 20 $ 23 $ 11 $ 9 (1) These components of net periodic pension cost are included in other (income) and expense in the Consolidated Income Statement. |
Schedule of contributions | The table below includes contributions to the following plans: (Dollars in millions) Plan Contributions For the three months ended March 31: 2024 2023 U.S. nonpension postretirement benefit plans $ 89 $ 109 Non-U.S. DB and multi-employer plans (1) 14 7 Total plan contributions $ 103 $ 117 (1) Amounts reported net of refunds. |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Noncontrolling Interest [Line Items] | |||
Provision for/(benefit from) income taxes | $ (502) | $ 124 | |
Effective tax rate | (46.70%) | 11.70% | |
Commitment With Third Party Financial Institution | |||
Noncontrolling Interest [Line Items] | |||
Contractual obligation | $ 113 | $ 101 | |
Commitment With Third Party Financial Institution | Minimum | |||
Noncontrolling Interest [Line Items] | |||
Contractual obligation average payment term duration | 90 days | ||
Commitment With Third Party Financial Institution | Maximum | |||
Noncontrolling Interest [Line Items] | |||
Contractual obligation average payment term duration | 120 days |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue by Major Products and Service Offerings (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenue by Major Products/Service Offerings | ||
Total Revenue | $ 14,462 | $ 14,252 |
Operating Segments | ||
Revenue by Major Products/Service Offerings | ||
Total Revenue | 14,354 | 14,083 |
Other | ||
Revenue by Major Products/Service Offerings | ||
Revenue | 108 | 169 |
Software | Operating Segments | ||
Revenue by Major Products/Service Offerings | ||
Total Revenue | 5,899 | 5,591 |
Consulting | Operating Segments | ||
Revenue by Major Products/Service Offerings | ||
Total Revenue | 5,186 | 5,197 |
Infrastructure | Operating Segments | ||
Revenue by Major Products/Service Offerings | ||
Total Revenue | 3,076 | 3,098 |
Financing | Operating Segments | ||
Revenue by Major Products/Service Offerings | ||
Total Revenue | 193 | 196 |
Hybrid Platform & Solutions | Software | Operating Segments | ||
Revenue by Major Products/Service Offerings | ||
Revenue | 4,098 | 3,850 |
Transaction Processing | Software | Operating Segments | ||
Revenue by Major Products/Service Offerings | ||
Revenue | 1,800 | 1,742 |
Business Transformation | Consulting | Operating Segments | ||
Revenue by Major Products/Service Offerings | ||
Revenue | 2,317 | 2,283 |
Application Operations | Consulting | Operating Segments | ||
Revenue by Major Products/Service Offerings | ||
Revenue | 1,938 | 1,989 |
Technology Consulting | Consulting | Operating Segments | ||
Revenue by Major Products/Service Offerings | ||
Revenue | 931 | 925 |
Hybrid Infrastructure | Infrastructure | Operating Segments | ||
Revenue by Major Products/Service Offerings | ||
Revenue | 1,803 | 1,709 |
Infrastructure Support | Infrastructure | Operating Segments | ||
Revenue by Major Products/Service Offerings | ||
Revenue | $ 1,273 | $ 1,389 |
Revenue Recognition - Disaggr_2
Revenue Recognition - Disaggregation of Revenue by Geography (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenue by Geography | ||
Revenue | $ 14,462 | $ 14,252 |
Americas | ||
Revenue by Geography | ||
Revenue | 7,296 | 7,078 |
Europe/Middle East/Africa | ||
Revenue by Geography | ||
Revenue | 4,313 | 4,331 |
Asia Pacific | ||
Revenue by Geography | ||
Revenue | $ 2,853 | $ 2,843 |
Revenue Recognition - Remaining
Revenue Recognition - Remaining Performance Obligations (Details) $ in Billions | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Remaining Performance Obligations | |
Practical expedient, remaining performance obligations | true |
Remaining performance obligations related to customer contracts that are unsatisfied or partially unsatisfied | $ 56 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | |
Remaining Performance Obligations | |
Percentage of remaining performance obligation expected to be recognized | 70% |
Duration of expected recognition period for remaining performance obligation | 2 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-04-01 | |
Remaining Performance Obligations | |
Percentage of remaining performance obligation expected to be recognized | 27% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-04-01 | Minimum | |
Remaining Performance Obligations | |
Duration of expected recognition period for remaining performance obligation | 3 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-04-01 | Maximum | |
Remaining Performance Obligations | |
Duration of expected recognition period for remaining performance obligation | 5 years |
Revenue Recognition - Reconcili
Revenue Recognition - Reconciliation of Contract Balances (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
Reconciliation of Contract Balances | ||
Notes and accounts receivable — trade (net of allowances of $152 in 2024 and $192 in 2023) | $ 6,041 | $ 7,214 |
Notes and accounts receivable - trade, allowances | 152 | 192 |
Contract assets | 527 | 505 |
Deferred income (current) | 14,051 | 13,451 |
Deferred income (noncurrent) | 3,488 | $ 3,533 |
Revenue recognized that was included in deferred income at the beginning of the period | $ 4,300 |
Revenue Recognition - Trade All
Revenue Recognition - Trade Allowance for Credit Losses (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Roll forward of notes and accounts receivable - trade allowance for credit losses | ||
Allowance for Credit Loss, Beginning Balance | $ 192 | $ 233 |
Additions / (Releases) | (8) | 32 |
Write-offs | (29) | (79) |
Foreign currency and other | (3) | 6 |
Allowance for Credit Loss, Ending Balance | $ 152 | $ 192 |
Segments - Results of Continuin
Segments - Results of Continuing Operations (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Segment Information | ||
Revenue | $ 14,462 | $ 14,252 |
Segment profit | 1,074 | 1,058 |
Operating Segments | ||
Segment Information | ||
Revenue | 14,354 | 14,083 |
Segment profit | $ 2,327 | $ 2,213 |
Revenue year-to-year change (as a percent) | 1.90% | |
Pre-tax income year-to-year change (as a percent) | 5.20% | |
Pre-tax income margin (as a percent) | 16.20% | 15.70% |
Operating Segments | Software | ||
Segment Information | ||
Revenue | $ 5,899 | $ 5,591 |
Segment profit | $ 1,500 | $ 1,379 |
Revenue year-to-year change (as a percent) | 5.50% | |
Pre-tax income year-to-year change (as a percent) | 8.80% | |
Pre-tax income margin (as a percent) | 25.40% | 24.70% |
Operating Segments | Consulting | ||
Segment Information | ||
Revenue | $ 5,186 | $ 5,197 |
Segment profit | $ 424 | $ 427 |
Revenue year-to-year change (as a percent) | (0.20%) | |
Pre-tax income year-to-year change (as a percent) | (0.60%) | |
Pre-tax income margin (as a percent) | 8.20% | 8.20% |
Operating Segments | Infrastructure | ||
Segment Information | ||
Revenue | $ 3,076 | $ 3,098 |
Segment profit | $ 311 | $ 307 |
Revenue year-to-year change (as a percent) | (0.70%) | |
Pre-tax income year-to-year change (as a percent) | 1.40% | |
Pre-tax income margin (as a percent) | 10.10% | 9.90% |
Operating Segments | Financing | ||
Segment Information | ||
Revenue | $ 193 | $ 196 |
Segment profit | $ 92 | $ 100 |
Revenue year-to-year change (as a percent) | (1.60%) | |
Pre-tax income year-to-year change (as a percent) | (8.40%) | |
Pre-tax income margin (as a percent) | 47.70% | 51.20% |
Segments - Revenue Reconciliati
Segments - Revenue Reconciliation (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenue | ||
Revenue | $ 14,462 | $ 14,252 |
Operating Segments | ||
Revenue | ||
Revenue | 14,354 | 14,083 |
Other | ||
Revenue | ||
Other‒divested businesses | 35 | 94 |
Other revenue | $ 73 | $ 75 |
Segments - Pre-Tax Income Recon
Segments - Pre-Tax Income Reconciliation (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pre-tax income from continuing operations | ||
Amortization of acquired intangible assets | $ (428) | $ (392) |
Acquisition-related (charges)/income | (60) | (3) |
Non-operating retirement-related (costs)/income | (96) | 5 |
Stock-based compensation | (320) | (268) |
Net interest excluding the Financing segment | (223) | (217) |
Workforce rebalancing charges | (374) | (259) |
Other-divested businesses | 239 | 13 |
Total pre-tax income from continuing operations | 1,074 | 1,058 |
Operating Segments | ||
Pre-tax income from continuing operations | ||
Total pre-tax income from continuing operations | 2,327 | 2,213 |
Unallocated corporate amounts and other | ||
Pre-tax income from continuing operations | ||
Total pre-tax income from continuing operations | $ 9 | $ (33) |
Acquisitions & Divestitures - A
Acquisitions & Divestitures - Acquisitions (Details) $ / shares in Units, € in Millions, $ in Millions | 3 Months Ended | 8 Months Ended | ||||
Jun. 30, 2024 EUR (€) | Mar. 31, 2024 USD ($) acquisition | Dec. 31, 2024 USD ($) $ / shares | Dec. 31, 2023 USD ($) | Dec. 18, 2023 USD ($) € / option | Dec. 18, 2023 EUR (€) € / option | |
Acquisitions | ||||||
Restricted cash | $ 162 | $ 21 | ||||
2024 Acquisitions | ||||||
Acquisitions | ||||||
Percentage of business acquired (as a percent) | 100% | |||||
Aggregate acquisitions cost | $ 255 | |||||
Cash consideration payable | 157 | |||||
Restricted cash | $ 144 | |||||
2024 Acquisitions | Software | ||||||
Acquisitions | ||||||
Number of acquisitions | acquisition | 2 | |||||
2024 Acquisitions | Consulting | ||||||
Acquisitions | ||||||
Number of acquisitions | acquisition | 1 | |||||
StreamSets and webMethods | Foreign Exchange Call Option | ||||||
Acquisitions | ||||||
Derivative premium | $ 49 | |||||
Notional amount | $ 2,300 | € 2,130 | ||||
Foreign exchange call option strike price (in euros per option) | € / option | 1.095 | 1.095 | ||||
StreamSets and webMethods | Forecast | ||||||
Acquisitions | ||||||
Aggregate acquisitions cost | € | € 2,130 | |||||
HashiCorp | Forecast | ||||||
Acquisitions | ||||||
Aggregate acquisitions cost | $ 6,400 | |||||
Business acquisition, cash per share (in dollars per share) | $ / shares | $ 35 |
Acquisitions & Divestitures - P
Acquisitions & Divestitures - Purchase Price Allocation (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | |
Acquisitions | |||
Goodwill | $ 59,534 | $ 60,178 | $ 55,949 |
2024 Acquisitions | |||
Acquisitions | |||
Current assets | 17 | ||
Property, plant and equipment/noncurrent assets | 2 | ||
Goodwill | 195 | ||
Total assets acquired | 284 | ||
Current liabilities | 13 | ||
Noncurrent liabilities | 15 | ||
Total liabilities assumed | 29 | ||
Total purchase price | 255 | ||
2024 Acquisitions | Client relationships | |||
Acquisitions | |||
Intangible assets | $ 31 | ||
2024 Acquisitions | Client relationships | Minimum | |||
Acquisitions | |||
Weighted average useful life | 2 years | ||
2024 Acquisitions | Client relationships | Maximum | |||
Acquisitions | |||
Weighted average useful life | 7 years | ||
2024 Acquisitions | Completed technology | |||
Acquisitions | |||
Intangible assets | $ 37 | ||
Weighted average useful life | 7 years | ||
2024 Acquisitions | Trademarks | |||
Acquisitions | |||
Intangible assets | $ 0 | ||
Weighted average useful life | 3 years |
Acquisitions & Divestitures - D
Acquisitions & Divestitures - Divestitures (Details) - Discontinued Operations, Disposed of by Sale - The Weather Company $ in Millions | Jan. 31, 2024 USD ($) |
Divestitures | |
Consideration | $ 1,100 |
Contingent consideration | 250 |
Cash consideration received | 750 |
Financing receivable | $ 100 |
Seller financing loan term | 7 years |
Pre-tax gain on sale of business | $ 241 |
Contingent Consideration, Attainment Of Certain Investment Return Metrics | |
Divestitures | |
Contingent consideration | $ 200 |
Other (Income) and Expense (Det
Other (Income) and Expense (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jan. 31, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | |
Other Income and Expenses [Abstract] | |||
Foreign currency transaction losses/(gains) | $ (205) | $ 88 | |
(Gains)/losses on derivative instruments | 287 | (142) | |
Interest income | (210) | (170) | |
Net (gains)/losses from securities and investment assets | (10) | 5 | |
Retirement-related costs/(income) | 96 | (5) | |
Other | (274) | (22) | |
Total other (income) and expense | $ (317) | $ (245) | |
Discontinued Operations, Disposed of by Sale | The Weather Company | |||
Divestitures | |||
Pre-tax gain on sale of business | $ 241 |
Earnings Per Share of Common _3
Earnings Per Share of Common Stock - Computation (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Number of shares on which basic earnings per share is calculated: | ||
Weighted-average shares outstanding during period (in shares) | 917,178,779 | 907,526,887 |
Add - Incremental shares under stock-based compensation plans (in shares) | 14,256,390 | 8,609,239 |
Add - Incremental shares associated with contingently issuable shares (in shares) | 1,996,144 | 1,709,153 |
Number of shares on which diluted earnings per share is calculated (in shares) | 933,431,312 | 917,845,279 |
Net income on which basic earnings per share is calculated | ||
Income from continuing operations | $ 1,575 | $ 934 |
Income/(loss) from discontinued operations, net of tax | 30 | (7) |
Net income | 1,605 | 927 |
Net income/(loss) on which diluted earnings per share is calculated | ||
Income from continuing operations | 1,575 | 934 |
Net income applicable to contingently issuable shares | 0 | 0 |
Income from continuing operations on which diluted earnings per share is calculated | 1,575 | 934 |
Income/(loss) from discontinued operations, net of tax, on which diluted earnings per share is calculated | 30 | (7) |
Net income on which diluted earnings per share is calculated | $ 1,605 | $ 927 |
Assuming dilution: | ||
Continuing operations (in dollars per share) | $ 1.69 | $ 1.02 |
Discontinued operations (in dollars per share) | 0.03 | (0.01) |
Total (in dollars per share) | 1.72 | 1.01 |
Basic: | ||
Continuing operations (in dollars per share) | 1.72 | 1.03 |
Discontinued operations (in dollars per share) | 0.03 | (0.01) |
Total (in dollars per share) | $ 1.75 | $ 1.02 |
Earnings Per Share of Common _4
Earnings Per Share of Common Stock - Antidilutive Stock Options (Details) - shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Stock option | ||
Antidilutive stock options | ||
Outstanding stock options not included in the computation of diluted earnings per share (in shares) | 61,359 | 960,929 |
Financial Assets & Liabilitie_2
Financial Assets & Liabilities - Impairment (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Investments, All Other Investments [Abstract] | ||
Impairment for credit losses | $ 0 | $ 0 |
Financial Assets & Liabilitie_3
Financial Assets & Liabilities - Fair Value Measurements (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Jan. 31, 2024 | Dec. 31, 2023 |
Financial assets and financial liabilities measured at fair value on a recurring basis: | |||
Debt securities - current | $ 4,512 | $ 373 | |
Discontinued Operations, Disposed of by Sale | The Weather Company | |||
Financial assets and financial liabilities measured at fair value on a recurring basis: | |||
Financing receivable | $ 100 | ||
Foreign Exchange Call Option | |||
Financial assets and financial liabilities measured at fair value on a recurring basis: | |||
Derivatives not designated as hedging - Assets | 12 | 62 | |
Fair Value, Recurring | |||
Financial assets and financial liabilities measured at fair value on a recurring basis: | |||
Cash equivalents | 7,719 | 7,699 | |
Total assets | 12,686 | 8,446 | |
Total liabilities | 564 | 593 | |
Fair Value, Recurring | Prepaid Expenses and Other Current Assets | |||
Financial assets and financial liabilities measured at fair value on a recurring basis: | |||
Derivative assets | 328 | 304 | |
Fair Value, Recurring | Other Noncurrent Assets | |||
Financial assets and financial liabilities measured at fair value on a recurring basis: | |||
Derivative assets | 12 | 37 | |
Fair Value, Recurring | Other Current Liabilities | |||
Financial assets and financial liabilities measured at fair value on a recurring basis: | |||
Derivative liabilities | 95 | 294 | |
Fair Value, Recurring | Other Noncurrent Liabilities | |||
Financial assets and financial liabilities measured at fair value on a recurring basis: | |||
Derivative liabilities | 469 | 299 | |
Fair Value, Recurring | Level 1 | |||
Financial assets and financial liabilities measured at fair value on a recurring basis: | |||
Equity investments | 7 | 25 | |
Fair Value, Recurring | Level 1 | Money market funds | |||
Financial assets and financial liabilities measured at fair value on a recurring basis: | |||
Cash equivalents | 487 | 494 | |
Fair Value, Recurring | Level 2 | |||
Financial assets and financial liabilities measured at fair value on a recurring basis: | |||
Debt securities - current | 4,512 | 373 | |
Fair Value, Recurring | Level 2 | Interest rate contracts | |||
Financial assets and financial liabilities measured at fair value on a recurring basis: | |||
Derivatives designated as hedging - Assets | 0 | 2 | |
Derivatives designated as hedging - Liabilities | 436 | 299 | |
Fair Value, Recurring | Level 2 | Foreign exchange contracts | |||
Financial assets and financial liabilities measured at fair value on a recurring basis: | |||
Derivatives designated as hedging - Assets | 263 | 131 | |
Derivatives designated as hedging - Liabilities | 102 | 275 | |
Derivatives not designated as hedging - Assets | 23 | 115 | |
Derivatives not designated as hedging - Liabilities | 25 | 19 | |
Fair Value, Recurring | Level 2 | Equity contracts | |||
Financial assets and financial liabilities measured at fair value on a recurring basis: | |||
Derivatives not designated as hedging - Assets | 55 | 93 | |
Derivatives not designated as hedging - Liabilities | 1 | 0 | |
Fair Value, Recurring | Level 2 | Time deposits and certificates of deposit | |||
Financial assets and financial liabilities measured at fair value on a recurring basis: | |||
Cash equivalents | 7,232 | 7,206 | |
Fair Value, Recurring | Level 2 And 3 | |||
Financial assets and financial liabilities measured at fair value on a recurring basis: | |||
Debt securities - noncurrent | $ 108 | $ 8 |
Financial Assets & Liabilitie_4
Financial Assets & Liabilities - Not Measured at Fair Value (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Long-Term Debt | ||
Long-term debt | $ 54,033 | $ 50,121 |
Fair value of long-term debt | $ 51,656 | $ 48,284 |
Financing Receivables - Payment
Financing Receivables - Payment Terms (Details) | 3 Months Ended |
Mar. 31, 2024 | |
Loans Receivable | Maximum | |
Financing receivables | |
Financing receivable, payment terms | 7 years |
Finance Leases Portfolio Segment | Maximum | |
Financing receivables | |
Financing receivable, payment terms | 5 years |
Commercial Financing Receivables | Minimum | |
Financing receivables | |
Financing receivable, payment terms | 30 days |
Commercial Financing Receivables | Maximum | |
Financing receivables | |
Financing receivable, payment terms | 60 days |
Financing Receivables - Compone
Financing Receivables - Components of Financing Receivables (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Components of the company's financing receivables | ||
Net investment in lease, gross | $ 3,949 | $ 4,261 |
Net investment in lease, unearned income | (402) | (429) |
Net investment in lease, unguaranteed residual value | 424 | 458 |
Net investment in lease, amortized cost | 3,971 | 4,290 |
Net investment in lease, allowance for credit loss | (57) | (63) |
Total net investment in lease, net | 3,914 | 4,227 |
Financing receivable and net investment in lease, gross | 11,017 | 13,173 |
Financing receivable and net investment in lease, unearned income | (848) | (915) |
Financing receivable and net investment in lease, unguaranteed residual value | 424 | 458 |
Financing receivable and net investment in lease, amortized cost | 10,593 | 12,716 |
Financing receivable and net investment in lease, allowance for credit loss | (145) | (156) |
Financing receivable and net investment in lease, net | 10,448 | 12,560 |
Asset Pledged as Collateral | ||
Components of the company's financing receivables | ||
Amortized cost | 193 | 232 |
Current portion | ||
Components of the company's financing receivables | ||
Net investment in lease, current | 1,493 | 1,520 |
Financing receivable and net investment in lease, net | 5,521 | 6,793 |
Noncurrent portion | ||
Components of the company's financing receivables | ||
Net investment in lease, noncurrent | 2,421 | 2,707 |
Financing receivable and net investment in lease, net | 4,927 | 5,766 |
Loans Receivable | ||
Components of the company's financing receivables | ||
Financing receivables, gross | 5,983 | 7,060 |
Unearned income | (446) | (486) |
Amortized cost | 5,537 | 6,574 |
Allowance for credit losses | (82) | (87) |
Total financing receivables, net | 5,455 | 6,486 |
Loans Receivable | Current portion | ||
Components of the company's financing receivables | ||
Total financing receivables, net | 2,949 | 3,427 |
Loans Receivable | Noncurrent portion | ||
Components of the company's financing receivables | ||
Total financing receivables, net | 2,506 | 3,059 |
Held for Investment | ||
Components of the company's financing receivables | ||
Financing receivables, gross | 441 | 1,160 |
Amortized cost | 441 | 1,160 |
Allowance for credit losses | (6) | (6) |
Total financing receivables, net | 435 | 1,155 |
Held for Investment | Current portion | ||
Components of the company's financing receivables | ||
Total financing receivables, net | 435 | 1,155 |
Held for Sale | ||
Components of the company's financing receivables | ||
Financing receivables, gross | 644 | 692 |
Amortized cost | 644 | 692 |
Total financing receivables, net | 644 | 692 |
Held for Sale | Current portion | ||
Components of the company's financing receivables | ||
Total financing receivables, net | $ 644 | $ 692 |
Financing Receivables - Transfe
Financing Receivables - Transfer of Financing Assets (Details) - USD ($) $ in Millions | 3 Months Ended | ||||
Mar. 31, 2024 | Mar. 31, 2023 | Jan. 31, 2024 | Dec. 31, 2023 | Nov. 30, 2023 | |
Financing receivables | |||||
Financing receivable transferred, net gain (loss) | $ (15) | $ (24) | |||
Commercial Financing Receivables | |||||
Financing receivables | |||||
Financing receivables transferred | 1,802 | 2,233 | |||
Financing receivables transferred and uncollected | $ 655 | $ 780 | |||
Commercial Financing Receivables | Third Party Investor | |||||
Financing receivables | |||||
transfer of financial assets, sales period | 1 year | ||||
Commercial Financing Receivables | Third Party Investor | Maximum | |||||
Financing receivables | |||||
Financing receivables to be sold | $ 1,300 | $ 1,900 | $ 3,000 |
Financing Receivables - By Port
Financing Receivables - By Portfolio Segment (Details) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 USD ($) class | Dec. 31, 2023 USD ($) class | |
Financing receivables | ||
Amortized cost | $ 10,593 | $ 12,716 |
Allowance for credit losses: | ||
Allowance for credit losses, beginning balance | 156 | |
Allowance for credit losses, ending balance | $ 145 | $ 156 |
Client Financing Receivables | ||
Financing receivables | ||
Number of classes of financing receivable | class | 3 | 3 |
Amortized cost | $ 9,508 | $ 10,863 |
Allowance for credit losses: | ||
Allowance for credit losses, beginning balance | 150 | 168 |
Write-offs | 0 | (18) |
Recoveries | 0 | 5 |
Additions/(releases) | (10) | (12) |
Other | (1) | 8 |
Allowance for credit losses, ending balance | 139 | 150 |
Client Financing Receivables | Americas | ||
Financing receivables | ||
Amortized cost | 5,722 | 6,488 |
Allowance for credit losses: | ||
Allowance for credit losses, beginning balance | 92 | 88 |
Write-offs | 0 | (9) |
Recoveries | 0 | 0 |
Additions/(releases) | (10) | 5 |
Other | 0 | 7 |
Allowance for credit losses, ending balance | 82 | 92 |
Client Financing Receivables | Europe/Middle East/Africa | ||
Financing receivables | ||
Amortized cost | 2,511 | 3,007 |
Allowance for credit losses: | ||
Allowance for credit losses, beginning balance | 48 | 60 |
Write-offs | 0 | (1) |
Recoveries | 0 | 2 |
Additions/(releases) | 0 | (14) |
Other | (1) | 1 |
Allowance for credit losses, ending balance | 46 | 48 |
Client Financing Receivables | Asia Pacific | ||
Financing receivables | ||
Amortized cost | 1,275 | 1,368 |
Allowance for credit losses: | ||
Allowance for credit losses, beginning balance | 11 | 20 |
Write-offs | 0 | (8) |
Recoveries | 0 | 3 |
Additions/(releases) | 1 | (4) |
Other | 0 | (1) |
Allowance for credit losses, ending balance | $ 12 | $ 11 |
Financing Receivables - Past Du
Financing Receivables - Past Due (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Past Due Financing Receivable | ||
Amortized cost | $ 10,593 | $ 12,716 |
Client Financing Receivables | ||
Past Due Financing Receivable | ||
Amortized cost | 9,508 | 10,863 |
Amortized Cost Not Accruing | 109 | 110 |
Impaired financing receivables, related allowance | 105 | 106 |
Client Financing Receivables | Financial Asset, Equal to or Greater than 90 Days Past Due | ||
Past Due Financing Receivable | ||
Amortized cost | 152 | 151 |
Amortized Cost > 90 Days and Accruing | 45 | 43 |
Billed Invoices > 90 Days and Accruing | 8 | 7 |
Client Financing Receivables | Americas | ||
Past Due Financing Receivable | ||
Amortized cost | 5,722 | 6,488 |
Amortized Cost Not Accruing | 71 | 71 |
Client Financing Receivables | Americas | Financial Asset, Equal to or Greater than 90 Days Past Due | ||
Past Due Financing Receivable | ||
Amortized cost | 102 | 111 |
Amortized Cost > 90 Days and Accruing | 33 | 40 |
Billed Invoices > 90 Days and Accruing | 3 | 6 |
Client Financing Receivables | Europe/Middle East/Africa | ||
Past Due Financing Receivable | ||
Amortized cost | 2,511 | 3,007 |
Amortized Cost Not Accruing | 30 | 31 |
Client Financing Receivables | Europe/Middle East/Africa | Financial Asset, Equal to or Greater than 90 Days Past Due | ||
Past Due Financing Receivable | ||
Amortized cost | 41 | 31 |
Amortized Cost > 90 Days and Accruing | 12 | 1 |
Billed Invoices > 90 Days and Accruing | 4 | 1 |
Client Financing Receivables | Asia Pacific | ||
Past Due Financing Receivable | ||
Amortized cost | 1,275 | 1,368 |
Amortized Cost Not Accruing | 8 | 8 |
Client Financing Receivables | Asia Pacific | Financial Asset, Equal to or Greater than 90 Days Past Due | ||
Past Due Financing Receivable | ||
Amortized cost | 8 | 9 |
Amortized Cost > 90 Days and Accruing | 0 | 1 |
Billed Invoices > 90 Days and Accruing | $ 0 | $ 0 |
Financing Receivables - Credit
Financing Receivables - Credit Quality Year of Origination (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Amortized cost for each class of receivables, by credit quality indicator | ||
Financing receivable and net investment in lease, amortized cost | $ 10,593 | $ 12,716 |
Americas | Aaa – Baa3 | ||
Amortized cost for each class of receivables, by credit quality indicator | ||
Originated in current fiscal year | 241 | 2,292 |
Originated in fiscal year before latest fiscal year | 1,929 | 1,645 |
Originated two years before latest fiscal year | 1,426 | 655 |
Originated three years before latest fiscal year | 504 | 205 |
Originated four years before latest fiscal year | 115 | 104 |
Originated five or more years before latest fiscal year | 111 | 55 |
Financing receivable and net investment in lease, amortized cost | 4,327 | 4,955 |
Americas | Ba1 – C | ||
Amortized cost for each class of receivables, by credit quality indicator | ||
Originated in current fiscal year | 219 | 1,028 |
Originated in fiscal year before latest fiscal year | 782 | 268 |
Originated two years before latest fiscal year | 216 | 85 |
Originated three years before latest fiscal year | 61 | 79 |
Originated four years before latest fiscal year | 54 | 23 |
Originated five or more years before latest fiscal year | 63 | 50 |
Financing receivable and net investment in lease, amortized cost | 1,395 | 1,533 |
Europe/Middle East/Africa | Aaa – Baa3 | ||
Amortized cost for each class of receivables, by credit quality indicator | ||
Originated in current fiscal year | 73 | 750 |
Originated in fiscal year before latest fiscal year | 552 | 687 |
Originated two years before latest fiscal year | 557 | 284 |
Originated three years before latest fiscal year | 227 | 106 |
Originated four years before latest fiscal year | 66 | 58 |
Originated five or more years before latest fiscal year | 56 | 16 |
Financing receivable and net investment in lease, amortized cost | 1,531 | 1,901 |
Europe/Middle East/Africa | Ba1 – C | ||
Amortized cost for each class of receivables, by credit quality indicator | ||
Originated in current fiscal year | 108 | 520 |
Originated in fiscal year before latest fiscal year | 413 | 374 |
Originated two years before latest fiscal year | 297 | 83 |
Originated three years before latest fiscal year | 60 | 60 |
Originated four years before latest fiscal year | 44 | 38 |
Originated five or more years before latest fiscal year | 57 | 30 |
Financing receivable and net investment in lease, amortized cost | 980 | 1,106 |
Asia Pacific | Aaa – Baa3 | ||
Amortized cost for each class of receivables, by credit quality indicator | ||
Originated in current fiscal year | 125 | 501 |
Originated in fiscal year before latest fiscal year | 398 | 386 |
Originated two years before latest fiscal year | 349 | 110 |
Originated three years before latest fiscal year | 83 | 97 |
Originated four years before latest fiscal year | 74 | 40 |
Originated five or more years before latest fiscal year | 56 | 39 |
Financing receivable and net investment in lease, amortized cost | 1,085 | 1,174 |
Asia Pacific | Ba1 – C | ||
Amortized cost for each class of receivables, by credit quality indicator | ||
Originated in current fiscal year | 26 | 70 |
Originated in fiscal year before latest fiscal year | 57 | 42 |
Originated two years before latest fiscal year | 38 | 40 |
Originated three years before latest fiscal year | 33 | 22 |
Originated four years before latest fiscal year | 19 | 8 |
Originated five or more years before latest fiscal year | 17 | 12 |
Financing receivable and net investment in lease, amortized cost | $ 189 | $ 195 |
Leases - Lease Amounts Included
Leases - Lease Amounts Included in Consolidated Income Statement (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Lease income — sales-type and direct financing leases: | ||
Sales-type lease selling price | $ 113 | $ 90 |
Less: Carrying value of underlying assets | (28) | (30) |
Gross profit | 85 | 61 |
Interest income on lease receivables | 69 | 59 |
Total sales-type and direct financing lease income | 154 | 119 |
Lease income — operating leases | 18 | 26 |
Variable lease income | 20 | 21 |
Total lease income | $ 192 | $ 166 |
Intangible Assets Including G_3
Intangible Assets Including Goodwill - Intangible Assets by Class (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Intangible asset balances by major asset class | ||
Gross Carrying Amount | $ 18,266 | $ 18,265 |
Accumulated Amortization | (7,516) | (7,229) |
Net Carrying Amount | 10,750 | 11,036 |
Amount of foreign currency translation increase (decrease) | (57) | 50 |
Capitalized software | ||
Intangible asset balances by major asset class | ||
Gross Carrying Amount | 1,566 | 1,636 |
Accumulated Amortization | (663) | (762) |
Net Carrying Amount | 903 | 874 |
Client relationships | ||
Intangible asset balances by major asset class | ||
Gross Carrying Amount | 9,014 | 9,053 |
Accumulated Amortization | (3,699) | (3,500) |
Net Carrying Amount | 5,316 | 5,553 |
Completed technology | ||
Intangible asset balances by major asset class | ||
Gross Carrying Amount | 5,726 | 5,713 |
Accumulated Amortization | (2,668) | (2,510) |
Net Carrying Amount | 3,059 | 3,203 |
Patents/trademarks | ||
Intangible asset balances by major asset class | ||
Gross Carrying Amount | 1,808 | 1,821 |
Accumulated Amortization | (458) | (436) |
Net Carrying Amount | 1,350 | 1,385 |
Other | ||
Intangible asset balances by major asset class | ||
Gross Carrying Amount | 151 | 41 |
Accumulated Amortization | (28) | (20) |
Net Carrying Amount | $ 123 | $ 22 |
Intangible Assets Including G_4
Intangible Assets Including Goodwill - Intangible Assets Activity (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intangible assets, increase (decrease) | $ (287) | |
Intangible asset amortization expense | 598 | $ 547 |
Retirement of fully amortized intangible assets | $ 224 |
Intangible Assets Including G_5
Intangible Assets Including Goodwill - Future Amortization (Details) $ in Millions | Mar. 31, 2024 USD ($) |
Future amortization expense, by year | |
Remainder of 2024 | $ 1,764 |
2025 | 2,040 |
2026 | 1,845 |
2027 | 1,695 |
2028 | 1,384 |
Thereafter | 2,022 |
Capitalized software | |
Future amortization expense, by year | |
Remainder of 2024 | 443 |
2025 | 310 |
2026 | 140 |
2027 | 10 |
2028 | 0 |
Thereafter | 0 |
Acquired intangibles | |
Future amortization expense, by year | |
Remainder of 2024 | 1,321 |
2025 | 1,729 |
2026 | 1,705 |
2027 | 1,686 |
2028 | 1,384 |
Thereafter | $ 2,022 |
Intangible Assets Including G_6
Intangible Assets Including Goodwill - Goodwill by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Changes in Goodwill Balances | ||
Beginning Balance | $ 60,178 | $ 55,949 |
Goodwill Additions | 195 | 3,953 |
Purchase Price Adjustments | (4) | (15) |
Divestitures | (464) | 0 |
Foreign Currency Translation and Other Adjustments | (372) | 291 |
Ending Balance | 59,534 | 60,178 |
Goodwill impairment losses | 0 | 0 |
Goodwill accumulated impairment losses | 0 | 0 |
Software | ||
Changes in Goodwill Balances | ||
Beginning Balance | 46,447 | 42,712 |
Goodwill Additions | 91 | 3,538 |
Purchase Price Adjustments | (4) | (17) |
Divestitures | 0 | 0 |
Foreign Currency Translation and Other Adjustments | (304) | 214 |
Ending Balance | 46,230 | 46,447 |
Consulting | ||
Changes in Goodwill Balances | ||
Beginning Balance | 8,883 | 8,409 |
Goodwill Additions | 96 | 403 |
Purchase Price Adjustments | 0 | 2 |
Divestitures | 0 | 0 |
Foreign Currency Translation and Other Adjustments | (57) | 69 |
Ending Balance | 8,922 | 8,883 |
Infrastructure | ||
Changes in Goodwill Balances | ||
Beginning Balance | 4,384 | 4,363 |
Goodwill Additions | 8 | 12 |
Purchase Price Adjustments | 0 | 0 |
Divestitures | 0 | 0 |
Foreign Currency Translation and Other Adjustments | (11) | 8 |
Ending Balance | 4,381 | 4,384 |
Other | ||
Changes in Goodwill Balances | ||
Beginning Balance | 464 | 464 |
Goodwill Additions | 0 | 0 |
Purchase Price Adjustments | 0 | 0 |
Divestitures | (464) | 0 |
Foreign Currency Translation and Other Adjustments | 0 | 0 |
Ending Balance | $ 0 | $ 464 |
Borrowings - Short-Term Debt (D
Borrowings - Short-Term Debt (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Debt Disclosure [Abstract] | ||
Short-term debt | $ 5,471 | $ 6,426 |
Borrowings - Long-Term Debt, Co
Borrowings - Long-Term Debt, Components (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Borrowings | ||
Long-term debt, gross | $ 60,715 | $ 57,598 |
Long-term debt excluding finance lease obligations | 60,010 | 57,099 |
Less: net unamortized discount | 847 | 838 |
Less: net unamortized debt issuance costs | 174 | 154 |
Add: fair value adjustment | (191) | (60) |
Total | 59,502 | 56,546 |
Less: current maturities | 5,469 | 6,425 |
Total long-term debt (excluding current portion) | 54,033 | 50,121 |
United States of America, Dollars | ||
Borrowings | ||
Long-term debt, gross | 38,819 | 35,317 |
Euro Member Countries, Euro | ||
Borrowings | ||
Long-term debt, gross | 18,883 | 19,335 |
Maturing 2024 | United States of America, Dollars | ||
Borrowings | ||
Long-term debt, gross | $ 3,002 | 5,003 |
Debt instrument, weighted-average interest rate (as a percent) | 3% | |
Maturing 2024 | Euro Member Countries, Euro | ||
Borrowings | ||
Long-term debt, gross | $ 809 | 829 |
Debt instrument, weighted-average interest rate (as a percent) | 1.10% | |
Maturing 2025 | United States of America, Dollars | ||
Borrowings | ||
Long-term debt, gross | $ 1,605 | 1,601 |
Debt instrument, weighted-average interest rate (as a percent) | 5.10% | |
Maturing 2025 | Euro Member Countries, Euro | ||
Borrowings | ||
Long-term debt, gross | $ 3,237 | 3,315 |
Debt instrument, weighted-average interest rate (as a percent) | 1.60% | |
Maturing 2026 | United States of America, Dollars | ||
Borrowings | ||
Long-term debt, gross | $ 5,800 | 5,201 |
Debt instrument, weighted-average interest rate (as a percent) | 3.70% | |
Maturing 2027 | United States of America, Dollars | ||
Borrowings | ||
Long-term debt, gross | $ 4,119 | 3,619 |
Debt instrument, weighted-average interest rate (as a percent) | 3.30% | |
Maturing 2027 | Euro Member Countries, Euro | ||
Borrowings | ||
Long-term debt, gross | $ 2,158 | 2,210 |
Debt instrument, weighted-average interest rate (as a percent) | 2.30% | |
Maturing 2028 | United States of America, Dollars | ||
Borrowings | ||
Long-term debt, gross | $ 1,313 | 1,313 |
Debt instrument, weighted-average interest rate (as a percent) | 5% | |
Maturing 2028 | Euro Member Countries, Euro | ||
Borrowings | ||
Long-term debt, gross | $ 1,942 | 1,989 |
Debt instrument, weighted-average interest rate (as a percent) | 0.70% | |
Maturing 2029 | United States of America, Dollars | ||
Borrowings | ||
Long-term debt, gross | $ 3,750 | 3,250 |
Debt instrument, weighted-average interest rate (as a percent) | 3.60% | |
Maturing 2029 | Euro Member Countries, Euro | ||
Borrowings | ||
Long-term debt, gross | $ 1,079 | 1,105 |
Debt instrument, weighted-average interest rate (as a percent) | 1.50% | |
Maturing 2030 | United States of America, Dollars | ||
Borrowings | ||
Long-term debt, gross | $ 1,350 | 1,350 |
Debt instrument, weighted-average interest rate (as a percent) | 2% | |
Maturing 2030 | Euro Member Countries, Euro | ||
Borrowings | ||
Long-term debt, gross | $ 1,079 | 1,105 |
Debt instrument, weighted-average interest rate (as a percent) | 0.90% | |
Maturing 2031 | United States of America, Dollars | ||
Borrowings | ||
Long-term debt, gross | $ 500 | 0 |
Debt instrument, weighted-average interest rate (as a percent) | 4.80% | |
Maturing 2031 | Euro Member Countries, Euro | ||
Borrowings | ||
Long-term debt, gross | $ 2,698 | 2,762 |
Debt instrument, weighted-average interest rate (as a percent) | 2.70% | |
Maturing 2032 | United States of America, Dollars | ||
Borrowings | ||
Long-term debt, gross | $ 1,850 | 1,850 |
Debt instrument, weighted-average interest rate (as a percent) | 4.40% | |
Maturing 2032 | Euro Member Countries, Euro | ||
Borrowings | ||
Long-term debt, gross | $ 1,726 | 1,768 |
Debt instrument, weighted-average interest rate (as a percent) | 0.70% | |
Maturing 2033 | United States of America, Dollars | ||
Borrowings | ||
Long-term debt, gross | $ 750 | 750 |
Debt instrument, weighted-average interest rate (as a percent) | 4.80% | |
Maturing 2034 | United States of America, Dollars | ||
Borrowings | ||
Long-term debt, gross | $ 1,000 | 0 |
Debt instrument, weighted-average interest rate (as a percent) | 4.90% | |
Maturing 2034 | Euro Member Countries, Euro | ||
Borrowings | ||
Long-term debt, gross | $ 1,079 | 1,105 |
Debt instrument, weighted-average interest rate (as a percent) | 1.30% | |
Maturing 2035 | Euro Member Countries, Euro | ||
Borrowings | ||
Long-term debt, gross | $ 1,079 | 1,105 |
Debt instrument, weighted-average interest rate (as a percent) | 3.80% | |
Maturing 2038 | United States of America, Dollars | ||
Borrowings | ||
Long-term debt, gross | $ 83 | 83 |
Debt instrument, weighted-average interest rate (as a percent) | 8% | |
Maturing 2038 | United Kingdom, Pounds | ||
Borrowings | ||
Long-term debt, gross | $ 948 | 955 |
Debt instrument, weighted-average interest rate (as a percent) | 4.90% | |
Maturing 2039 | United States of America, Dollars | ||
Borrowings | ||
Long-term debt, gross | $ 2,745 | 2,745 |
Debt instrument, weighted-average interest rate (as a percent) | 4.50% | |
Maturing 2040 | United States of America, Dollars | ||
Borrowings | ||
Long-term debt, gross | $ 650 | 650 |
Debt instrument, weighted-average interest rate (as a percent) | 2.90% | |
Maturing 2040 | Euro Member Countries, Euro | ||
Borrowings | ||
Long-term debt, gross | $ 917 | 939 |
Debt instrument, weighted-average interest rate (as a percent) | 1.20% | |
Maturing 2042 | United States of America, Dollars | ||
Borrowings | ||
Long-term debt, gross | $ 1,107 | 1,107 |
Debt instrument, weighted-average interest rate (as a percent) | 4% | |
Maturing 2044 | United States of America, Dollars | ||
Borrowings | ||
Long-term debt, gross | $ 1,000 | 0 |
Debt instrument, weighted-average interest rate (as a percent) | 5.30% | |
Maturing 2043 | Euro Member Countries, Euro | ||
Borrowings | ||
Long-term debt, gross | $ 1,079 | 1,105 |
Debt instrument, weighted-average interest rate (as a percent) | 4% | |
Maturing 2045 | United States of America, Dollars | ||
Borrowings | ||
Long-term debt, gross | $ 27 | 27 |
Debt instrument, weighted-average interest rate (as a percent) | 7% | |
Maturing 2046 | United States of America, Dollars | ||
Borrowings | ||
Long-term debt, gross | $ 650 | 650 |
Debt instrument, weighted-average interest rate (as a percent) | 4.70% | |
Maturing 2049 | United States of America, Dollars | ||
Borrowings | ||
Long-term debt, gross | $ 3,000 | 3,000 |
Debt instrument, weighted-average interest rate (as a percent) | 4.30% | |
Maturing 2050 | United States of America, Dollars | ||
Borrowings | ||
Long-term debt, gross | $ 750 | 750 |
Debt instrument, weighted-average interest rate (as a percent) | 3% | |
Maturing 2052 | United States of America, Dollars | ||
Borrowings | ||
Long-term debt, gross | $ 1,400 | 1,400 |
Debt instrument, weighted-average interest rate (as a percent) | 4.20% | |
Maturing 2053 | United States of America, Dollars | ||
Borrowings | ||
Long-term debt, gross | $ 650 | 650 |
Debt instrument, weighted-average interest rate (as a percent) | 5.10% | |
Maturing 2054 | United States of America, Dollars | ||
Borrowings | ||
Long-term debt, gross | $ 1,400 | 0 |
Debt instrument, weighted-average interest rate (as a percent) | 5.30% | |
Maturing 2096 | United States of America, Dollars | ||
Borrowings | ||
Long-term debt, gross | $ 316 | 316 |
Debt instrument, weighted-average interest rate (as a percent) | 7.10% | |
Maturing 2024-2028 | Japan, Yen | ||
Borrowings | ||
Long-term debt, gross | $ 1,167 | 1,251 |
Debt instrument, weighted-average interest rate (as a percent) | 0.50% | |
Maturing 2024-2026 | Other currencies | ||
Borrowings | ||
Long-term debt, gross | $ 193 | 241 |
Debt instrument, weighted-average interest rate (as a percent) | 13.20% | |
Finance Lease Obligations Maturing 2024-2034 | ||
Borrowings | ||
Finance lease obligations | $ 705 | $ 499 |
Finance lease obligations, interest rate (as a percent) | 4.80% |
Borrowings - Long-Term Debt, _2
Borrowings - Long-Term Debt, Covenants (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Borrowings | |
Limit based on net tangible assets | 10% |
Revolving Credit Facility | |
Borrowings | |
Minimum net interest expense ratio | 2.20 |
Default provision on credit facility | $ 500 |
Borrowings - Long-Term Debt, De
Borrowings - Long-Term Debt, Debt Issued (Details) - US dollar, fixed-rate notes issued 2024 $ in Billions | Feb. 05, 2024 USD ($) |
Notes Issued | |
Aggregate amount of debt issued | $ 5.5 |
Minimum | |
Notes Issued | |
Credit facility term | 2 years |
Coupon rate (as a percent) | 4.60% |
Maximum | |
Notes Issued | |
Credit facility term | 30 years |
Coupon rate (as a percent) | 5.30% |
Borrowings - Pre-Swap Obligatio
Borrowings - Pre-Swap Obligations (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Pre-swap annual contractual obligations of long-term debt outstanding | ||
Remainder of 2024 | $ 4,335 | |
2025 | 5,048 | |
2026 | 6,241 | |
2027 | 6,384 | |
2028 | 3,912 | |
Thereafter | 34,794 | |
Total | $ 60,715 | $ 57,598 |
Borrowings - Interest on Debt (
Borrowings - Interest on Debt (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Interest on Debt | ||
Interest capitalized | $ 2 | $ 4 |
Total interest paid and accrued | 519 | 462 |
Cost of financing | ||
Interest on Debt | ||
Interest expense | 85 | 90 |
Interest expense | ||
Interest on Debt | ||
Interest expense | $ 432 | $ 367 |
Borrowings - Lines of Credit (D
Borrowings - Lines of Credit (Details) | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Revolving Credit Facility | |
Lines of Credit | |
Amount of credit facility | $ 10,000,000,000 |
Borrowings outstanding | 0 |
Three-Year Credit Agreement | |
Lines of Credit | |
Amount of credit facility | $ 2,500,000,000 |
Credit facility term | 3 years |
Five-Year Credit Agreement | |
Lines of Credit | |
Amount of credit facility | $ 7,500,000,000 |
Credit facility term | 5 years |
Commitments - Extensions of Cre
Commitments - Extensions of Credit (Details) - USD ($) $ in Billions | Mar. 31, 2024 | Dec. 31, 2023 |
Extended lines of credit | ||
Commitments, guarantees: | ||
Unused amounts in lines of credit to third-party entities and commitments for future financing to clients | $ 1.8 | $ 1.4 |
Financing for client purchase agreements | ||
Commitments, guarantees: | ||
Unused amounts in lines of credit to third-party entities and commitments for future financing to clients | $ 1.7 | $ 1.9 |
Commitments - Standard Warranty
Commitments - Standard Warranty Liability (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Movement in standard warranty liability | ||
Beginning Balance | $ 65 | $ 79 |
Current-period accruals | 17 | 17 |
Accrual adjustments to reflect actual experience | 7 | (17) |
Charges incurred | (20) | (21) |
Ending Balance | $ 69 | $ 58 |
Commitments - Extended Warranty
Commitments - Extended Warranty Liability (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Movement in deferred income | |||
Amortization of deferred revenue | $ (4,300) | ||
Deferred income (current) | 14,051 | $ 13,451 | |
Deferred income (noncurrent) | 3,488 | $ 3,533 | |
Extended Warranty | |||
Movement in deferred income | |||
Beginning Balance | 184 | $ 272 | |
Revenue deferred for new extended warranty contracts | 5 | 9 | |
Amortization of deferred revenue | (32) | (37) | |
Other | (3) | 1 | |
Ending Balance | 154 | 244 | |
Deferred income (current) | 94 | 129 | |
Deferred income (noncurrent) | $ 60 | $ 116 |
Contingencies (Details)
Contingencies (Details) $ in Millions | 3 Months Ended | ||
May 30, 2022 USD ($) | Jun. 08, 2021 USD ($) | Mar. 31, 2024 USD ($) country | |
Brazil Tax Matters | |||
Loss Contingencies | |||
Damages sought, value | $ 400 | ||
BMC v. IBM | |||
Loss Contingencies | |||
Direct damages sought, value | $ 718 | ||
Punitive damages sought, value | $ 718 | ||
Minimum | |||
Loss Contingencies | |||
Clients' presence in number of countries | country | 175 | ||
Minimum | IBM v. GF | |||
Loss Contingencies | |||
Damages sought, value | $ 1,500 |
Equity Activity - Reclassificat
Equity Activity - Reclassifications and Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||
Cost | $ 6,719 | $ 6,743 |
SG&A expense | 4,974 | 4,853 |
Other (income) and expense | (317) | (245) |
Interest expense | 432 | 367 |
Services | ||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||
Cost | 5,239 | 5,310 |
Sales | ||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||
Cost | 1,381 | 1,322 |
Financing | ||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||
Cost | 99 | 110 |
Accumulated Other Comprehensive Income/(Loss) | ||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||
Other Comprehensive Income (Loss), before Tax | 563 | (93) |
Other comprehensive income/(loss), Tax (Expense)/Benefit | (289) | 53 |
Other comprehensive income/(loss) | 273 | (40) |
Unrealized gains/(losses) arising during the period, Net of Tax Amount | 30 | (39) |
Reclassification/amortization, Net of Tax Amount | 243 | 0 |
Accumulated Foreign Currency Adjustment Attributable to Parent | ||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||
Other Comprehensive Income (Loss), before Tax | 55 | (87) |
Other comprehensive income/(loss), Tax (Expense)/Benefit | (154) | 56 |
Other comprehensive income/(loss) | (99) | (30) |
Unrealized gains/(losses) arising during the period, Net of Tax Amount | (99) | (30) |
AOCI, Accumulated Gain (Loss), Debt Securities, Available-for-Sale, Parent | ||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||
Other Comprehensive Income (Loss), before Tax | 0 | 15 |
Other comprehensive income/(loss), Tax (Expense)/Benefit | 0 | (4) |
Other comprehensive income/(loss) | 0 | 11 |
Unrealized gains/(losses) arising during the period, Before Tax Amount | 0 | 15 |
Unrealized gains/(losses) arising during the period, Tax (Expense)/Benefit | 0 | (4) |
Unrealized gains/(losses) arising during the period, Net of Tax Amount | 0 | 11 |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | ||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||
Other Comprehensive Income (Loss), before Tax | 246 | (151) |
Other comprehensive income/(loss), Tax (Expense)/Benefit | (63) | 38 |
Other comprehensive income/(loss) | 183 | (113) |
Unrealized gains/(losses) arising during the period, Before Tax Amount | 176 | (29) |
Unrealized gains/(losses) arising during the period, Tax (Expense)/Benefit | (47) | 6 |
Unrealized gains/(losses) arising during the period, Net of Tax Amount | 129 | (23) |
Reclassification/amortization, Net of Tax Amount | 54 | (90) |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | Cost of services | ||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||
Reclassification/amortization, Tax (Expense)/Benefit | 1 | 0 |
Reclassification/amortization, Net of Tax Amount | (3) | 2 |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | Cost of sales | ||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||
Reclassification/amortization, Tax (Expense)/Benefit | 4 | 4 |
Reclassification/amortization, Net of Tax Amount | (8) | (10) |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | Cost of financing | ||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||
Reclassification/amortization, Tax (Expense)/Benefit | 0 | (1) |
Reclassification/amortization, Net of Tax Amount | 1 | 4 |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | SG&A expense | ||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||
Reclassification/amortization, Tax (Expense)/Benefit | 1 | 3 |
Reclassification/amortization, Net of Tax Amount | (2) | (7) |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | Other (income) and expense | ||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||
Reclassification/amortization, Tax (Expense)/Benefit | (20) | 32 |
Reclassification/amortization, Net of Tax Amount | 59 | (94) |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | Interest expense | ||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||
Reclassification/amortization, Tax (Expense)/Benefit | (2) | (5) |
Reclassification/amortization, Net of Tax Amount | 6 | 16 |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | Reclassification out of Accumulated Other Comprehensive Income | ||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||
SG&A expense | (3) | (10) |
Other (income) and expense | 79 | (126) |
Interest expense | 9 | 21 |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | Reclassification out of Accumulated Other Comprehensive Income | Services | ||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||
Cost | (4) | 2 |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | Reclassification out of Accumulated Other Comprehensive Income | Sales | ||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||
Cost | (12) | (14) |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | Reclassification out of Accumulated Other Comprehensive Income | Financing | ||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||
Cost | 2 | 5 |
Accumulated Defined Benefit Plans Adjustment Attributable to Parent | ||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||
Other Comprehensive Income (Loss), before Tax | 262 | 130 |
Other comprehensive income/(loss), Tax (Expense)/Benefit | (72) | (38) |
Other comprehensive income/(loss) | 189 | 92 |
Unrealized gains/(losses) arising during the period, Net of Tax Amount | 0 | 2 |
Reclassification/amortization, Net of Tax Amount | 189 | 90 |
Accumulated Defined Benefit Plans Adjustment, Net Prior Service Attributable to Parent | ||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||
Unrealized gains/(losses) arising during the period, Before Tax Amount | 0 | 0 |
Unrealized gains/(losses) arising during the period, Tax (Expense)/Benefit | 0 | 1 |
Unrealized gains/(losses) arising during the period, Net of Tax Amount | 0 | 1 |
Reclassification/amortization, Before Tax Amount | (2) | (2) |
Reclassification/amortization, Tax (Expense)/Benefit | 0 | 1 |
Reclassification/amortization, Net of Tax Amount | (1) | (2) |
Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Attributable to Parent | ||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||
Unrealized gains/(losses) arising during the period, Before Tax Amount | 1 | 2 |
Unrealized gains/(losses) arising during the period, Tax (Expense)/Benefit | 0 | 0 |
Unrealized gains/(losses) arising during the period, Net of Tax Amount | 0 | 2 |
Reclassification/amortization, Before Tax Amount | 261 | 131 |
Reclassification/amortization, Tax (Expense)/Benefit | (72) | (38) |
Reclassification/amortization, Net of Tax Amount | 189 | 93 |
Retirement-Related Benefit Plans, Curtailments and Settlements | ||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||
Reclassification/amortization, Before Tax Amount | 2 | (1) |
Reclassification/amortization, Tax (Expense)/Benefit | 0 | 0 |
Reclassification/amortization, Net of Tax Amount | $ 2 | $ (1) |
Equity Activity - AOCI Rollforw
Equity Activity - AOCI Rollforward (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Balance at the beginning of the period | $ 22,613 | $ 22,021 |
Balance at the end of the period | 23,333 | 21,672 |
Accumulated Other Comprehensive Income/(Loss) | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Balance at the beginning of the period | (18,761) | (16,740) |
Other comprehensive income before reclassifications | 30 | (39) |
Amount reclassified from accumulated other comprehensive income | 243 | 0 |
Other comprehensive income/(loss) | 273 | (40) |
Balance at the end of the period | (18,488) | (16,780) |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Balance at the beginning of the period | (106) | (135) |
Other comprehensive income before reclassifications | 129 | (23) |
Amount reclassified from accumulated other comprehensive income | 54 | (90) |
Other comprehensive income/(loss) | 183 | (113) |
Balance at the end of the period | 76 | (248) |
Accumulated Foreign Currency Adjustment Attributable to Parent | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Balance at the beginning of the period | (3,488) | (3,591) |
Other comprehensive income before reclassifications | (99) | (30) |
Other comprehensive income/(loss) | (99) | (30) |
Balance at the end of the period | (3,588) | (3,621) |
Accumulated Defined Benefit Plans Adjustment Attributable to Parent | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Balance at the beginning of the period | (15,165) | (13,013) |
Other comprehensive income before reclassifications | 0 | 2 |
Amount reclassified from accumulated other comprehensive income | 189 | 90 |
Other comprehensive income/(loss) | 189 | 92 |
Balance at the end of the period | (14,976) | (12,921) |
AOCI, Accumulated Gain (Loss), Debt Securities, Available-for-Sale, Parent | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Balance at the beginning of the period | (1) | (1) |
Other comprehensive income before reclassifications | 0 | 11 |
Other comprehensive income/(loss) | 0 | 11 |
Balance at the end of the period | $ (1) | $ 10 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Offsetting (Details) € in Millions, $ in Millions | 3 Months Ended | ||||
Mar. 31, 2024 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | Dec. 18, 2023 USD ($) | Dec. 18, 2023 EUR (€) | |
Derivative Financial Instruments | |||||
Cash collateral rehypothecated | $ 7 | ||||
Potential reduction in net position of total derivative liabilities | 194 | 235 | |||
Potential reduction in net position of total derivative assets | 194 | 235 | |||
Unrealized gain (loss) on derivatives | (287) | $ 142 | |||
Foreign Exchange Call Option | |||||
Derivative Financial Instruments | |||||
Unrealized gain (loss) on derivatives | (50) | ||||
Fair value of derivatives | 12 | 62 | |||
StreamSets and webMethods | Foreign Exchange Call Option | |||||
Derivative Financial Instruments | |||||
Notional amount | $ 2,300 | € 2,130 | |||
Derivative premium | $ 49 | ||||
Other receivables | |||||
Derivative Financial Instruments | |||||
Right to reclaim cash collateral | 68 | 11 | |||
Accounts Payable | |||||
Derivative Financial Instruments | |||||
Obligation to return cash collateral | $ 7 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Hedging Programs (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 USD ($) instrument | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) instrument | |
Net Investment Hedging | |||
Derivative Financial Instruments | |||
Notional amount | $ 5,800,000,000 | $ 4,900,000,000 | |
Average remaining maturity | 2 months 12 days | 1 month 6 days | |
Interest Rate Swap | Fair Value Hedging | |||
Derivative Financial Instruments | |||
Notional amount | $ 6,700,000,000 | $ 6,700,000,000 | |
Average remaining maturity | 5 years 2 months 12 days | 5 years 6 months | |
Interest Rate Swap | Cash Flow Hedging | |||
Derivative Financial Instruments | |||
Notional amount | $ 0 | $ 0 | |
Forward-starting interest rate swaps | Cash Flow Hedging | |||
Derivative Financial Instruments | |||
Number of derivative instruments outstanding | instrument | 0 | 0 | |
Net gains (losses) before taxes in accumulated other comprehensive income/(loss), cash flow hedges | $ (117,000,000) | $ (121,000,000) | |
Gains (losses) expected to be reclassified to net income within the next 12 months | (14,000,000) | ||
Foreign exchange contracts | |||
Derivative Financial Instruments | |||
Gains (losses) expected to be reclassified to net income within the next 12 months | $ (62,000,000) | ||
Foreign exchange contracts | Not Designated as Hedging Instrument, Economic Hedge | |||
Derivative Financial Instruments | |||
Notional amount | $ 7,300,000,000 | 6,700,000,000 | |
Foreign exchange contracts | Not Designated as Hedging Instrument, Economic Hedge | Maximum | |||
Derivative Financial Instruments | |||
Term of contract | 1 year | ||
Foreign exchange contracts | Cash Flow Hedging | |||
Derivative Financial Instruments | |||
Notional amount | $ 5,200,000,000 | 5,200,000,000 | |
Net gains (losses) before taxes in accumulated other comprehensive income/(loss), cash flow hedges | $ 51,000,000 | 23,000,000 | |
Maximum length of time hedged | 7 years | ||
Foreign exchange contracts | Net Investment Hedging | |||
Derivative Financial Instruments | |||
Notional amount | $ 15,500,000,000 | 15,900,000,000 | |
Foreign Exchange Forward | Cash Flow Hedging | |||
Derivative Financial Instruments | |||
Notional amount | $ 9,600,000,000 | $ 9,200,000,000 | |
Average remaining maturity | 7 months 6 days | 7 months 6 days | |
Net gains (losses) before taxes in accumulated other comprehensive income/(loss), cash flow hedges | $ 248,000,000 | $ 40,000,000 | |
Gains (losses) expected to be reclassified to net income within the next 12 months | $ 186,000,000 | ||
Maximum length of time hedged | 2 years | ||
Currency Swap | Cash Flow Hedging | |||
Derivative Financial Instruments | |||
Net gains (losses) before taxes in accumulated other comprehensive income/(loss), cash flow hedges | $ (62,000,000) | (68,000,000) | |
Gains (losses) expected to be reclassified to net income within the next 12 months | (21,000,000) | ||
Equity contracts hedging employee compensation obligations | Not Designated as Hedging Instrument, Economic Hedge | |||
Derivative Financial Instruments | |||
Notional amount | $ 1,300,000,000 | $ 1,200,000,000 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Cumulative Basis Adjustments for Fair Value Hedges (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Short-Term Debt | ||
Amounts recorded in the Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges | ||
Carrying amount of the hedged item | $ 0 | $ (1) |
Cumulative hedging adjustments included in the carrying amount-assets/(liabilities) | 0 | (1) |
Long-Term Debt | ||
Amounts recorded in the Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges | ||
Carrying amount of the hedged item | (6,499) | (6,629) |
Cumulative hedging adjustments included in the carrying amount-assets/(liabilities) | 191 | 61 |
Hedging adjustments on discontinued hedging relationships | $ (188) | $ (200) |
Derivative Financial Instrume_6
Derivative Financial Instruments - Effect of Hedge Activity on Income and Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Derivative Instruments, Gain (Loss) | ||
Cost | $ 6,719 | $ 6,743 |
SG&A expense | 4,974 | 4,853 |
Other (income) and expense | (317) | (245) |
Interest expense | 432 | 367 |
Cost of services | ||
Derivative Instruments, Gain (Loss) | ||
Gains/(losses) of total hedge activity | 4 | (2) |
Cost of sales | ||
Derivative Instruments, Gain (Loss) | ||
Gains/(losses) of total hedge activity | 12 | 14 |
Cost of financing | ||
Derivative Instruments, Gain (Loss) | ||
Gains/(losses) of total hedge activity | (3) | (3) |
SG&A expense | ||
Derivative Instruments, Gain (Loss) | ||
Gains/(losses) of total hedge activity | 74 | 59 |
Other (income) and expense | ||
Derivative Instruments, Gain (Loss) | ||
Gains/(losses) of total hedge activity | (287) | 142 |
Interest expense | ||
Derivative Instruments, Gain (Loss) | ||
Gains/(losses) of total hedge activity | (15) | (14) |
Services | ||
Derivative Instruments, Gain (Loss) | ||
Cost | 5,239 | 5,310 |
Sales | ||
Derivative Instruments, Gain (Loss) | ||
Cost | 1,381 | 1,322 |
Financing | ||
Derivative Instruments, Gain (Loss) | ||
Cost | $ 99 | $ 110 |
Derivative Financial Instrume_7
Derivative Financial Instruments - Gains and Losses (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Derivative Instruments, Gain (Loss) | ||
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Cost, Interest expense, Selling, general and administrative, Other (income) and expense | Cost, Interest expense, Selling, general and administrative, Other (income) and expense |
Gain (loss) recognized in earnings on derivatives | $ (302) | $ 131 |
Gain (loss) recognized in earnings attributable to risk being hedged | 131 | (84) |
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Recognized in OCI | 787 | (253) |
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI | (52) | 122 |
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Amounts Excluded from Effectiveness Testing | 8 | 28 |
Interest rate contracts | Cash Flow Hedging | ||
Derivative Instruments, Gain (Loss) | ||
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Recognized in OCI - Cash flow hedges | 0 | 0 |
Foreign exchange contracts | Cash Flow Hedging | ||
Derivative Instruments, Gain (Loss) | ||
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Recognized in OCI - Cash flow hedges | 166 | (29) |
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Recognized in OCI - Amount excluded from the assessment of effectiveness | 10 | 0 |
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Amounts Excluded from Effectiveness Testing | (18) | 0 |
Foreign exchange contracts | Net Investment Hedging | ||
Derivative Instruments, Gain (Loss) | ||
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Recognized in OCI - Net investment hedges | 612 | (224) |
Foreign exchange contracts | Not Designated as Hedging Instrument, Economic Hedge | ||
Derivative Instruments, Gain (Loss) | ||
Gain (loss) recognized in earnings on derivatives | (207) | 16 |
Equity contracts | Not Designated as Hedging Instrument, Economic Hedge | ||
Derivative Instruments, Gain (Loss) | ||
Gain (loss) recognized in earnings on derivatives | 71 | 49 |
Cost of financing | Interest rate contracts | Fair Value Hedging | ||
Derivative Instruments, Gain (Loss) | ||
Gain (loss) recognized in earnings on derivatives | (27) | 13 |
Gain (loss) recognized in earnings attributable to risk being hedged | 22 | (17) |
Cost of financing | Interest rate contracts | Cash Flow Hedging | ||
Derivative Instruments, Gain (Loss) | ||
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI | (1) | (1) |
Cost of financing | Foreign exchange contracts | Cash Flow Hedging | ||
Derivative Instruments, Gain (Loss) | ||
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI | (1) | (4) |
Cost of financing | Foreign exchange contracts | Net Investment Hedging | ||
Derivative Instruments, Gain (Loss) | ||
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Amounts Excluded from Effectiveness Testing | 4 | 5 |
Interest expense | Interest rate contracts | Fair Value Hedging | ||
Derivative Instruments, Gain (Loss) | ||
Gain (loss) recognized in earnings on derivatives | (138) | 53 |
Gain (loss) recognized in earnings attributable to risk being hedged | 110 | (68) |
Interest expense | Interest rate contracts | Cash Flow Hedging | ||
Derivative Instruments, Gain (Loss) | ||
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI | (4) | (3) |
Interest expense | Foreign exchange contracts | Cash Flow Hedging | ||
Derivative Instruments, Gain (Loss) | ||
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI | (5) | (17) |
Interest expense | Foreign exchange contracts | Net Investment Hedging | ||
Derivative Instruments, Gain (Loss) | ||
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Amounts Excluded from Effectiveness Testing | 22 | 22 |
Cost of services | Foreign exchange contracts | Cash Flow Hedging | ||
Derivative Instruments, Gain (Loss) | ||
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI | 4 | (2) |
Cost of sales | Foreign exchange contracts | Cash Flow Hedging | ||
Derivative Instruments, Gain (Loss) | ||
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI | 12 | 14 |
SG&A expense | Foreign exchange contracts | Cash Flow Hedging | ||
Derivative Instruments, Gain (Loss) | ||
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI | 3 | 10 |
Other (income) and expense | Foreign exchange contracts | Cash Flow Hedging | ||
Derivative Instruments, Gain (Loss) | ||
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI | $ (61) | $ 126 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Stock-based compensation cost, allocation of recognized costs | ||
Pre-tax stock-based compensation cost | $ 320 | $ 268 |
Income tax benefits | (120) | (67) |
Net stock-based compensation cost | 200 | 201 |
Pre-tax stock-based compensation cost increase (decrease) | 52 | |
Unrecognized compensation cost related to non-vested awards | $ 1,900 | |
Unrecognized compensation cost related to non-vested awards, weighted average period of recognition | 2 years 7 months 6 days | |
Restricted Stock Units (RSUs) | ||
Stock-based compensation cost, allocation of recognized costs | ||
Pre-tax stock-based compensation cost increase (decrease) | $ 28 | |
Performance Shares | ||
Stock-based compensation cost, allocation of recognized costs | ||
Pre-tax stock-based compensation cost increase (decrease) | 15 | |
Stock option | ||
Stock-based compensation cost, allocation of recognized costs | ||
Pre-tax stock-based compensation cost increase (decrease) | 8 | |
Cost | ||
Stock-based compensation cost, allocation of recognized costs | ||
Pre-tax stock-based compensation cost | 56 | 46 |
SG&A expense | ||
Stock-based compensation cost, allocation of recognized costs | ||
Pre-tax stock-based compensation cost | 171 | 149 |
Research, development and engineering | ||
Stock-based compensation cost, allocation of recognized costs | ||
Pre-tax stock-based compensation cost | $ 93 | $ 74 |
Retirement-Related Benefits - U
Retirement-Related Benefits - U.S. Retirement Plan Changes (Details) - Pension Plan - U.S. Plans - USD ($) $ in Millions | 3 Months Ended | |
Jan. 01, 2024 | Mar. 31, 2024 | |
Retirement-Related Benefits | ||
Service period | 1 year | |
Benefit contribution monthly percent | 5% | |
Benefit contribution interest percent, through 2026 | 6% | |
Increase (decrease) in actuarial losses due to changes in assumptions | $ 100 | |
Minimum | ||
Retirement-Related Benefits | ||
Benefit contribution interest percent, 2027 through 2033 | 3% |
Retirement-Related Benefits - A
Retirement-Related Benefits - All Retirement Plans Cost (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Retirement Benefits [Abstract] | ||
Defined benefit pension and defined contribution pension plans — cost | $ 323 | $ 281 |
Nonpension postretirement plans — cost | 30 | 32 |
Total | $ 353 | $ 314 |
Year-to-year percent change, Defined benefit pension and defined contribution plans — cost (as a percent) | 14.80% | |
Year-to-year percent change, Nonpension postretirement plans — cost (as a percent) | (6.00%) | |
Year-to-year percent change, Total (as a percent) | 12.70% |
Retirement-Related Benefits - C
Retirement-Related Benefits - Cost of Pension Plans (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cost/(Income) of Pension Plans | ||
Total defined benefit pension and defined contribution plans cost recognized in the Consolidated Income Statement | $ 323 | $ 281 |
U.S. Plans | Pension Plan | ||
Cost/(Income) of Pension Plans | ||
Service cost | 98 | 0 |
Interest cost | 254 | 272 |
Expected return on plan assets | (340) | (382) |
Amortization of prior service costs/(credits) | 0 | 0 |
Recognized actuarial losses | 129 | 27 |
Curtailments and settlements | 0 | 0 |
Multi-employer plans | 0 | 0 |
Other costs/(credits) | 0 | 0 |
Total net periodic pension (income)/cost of defined benefit plans | 140 | (82) |
Cost of defined contribution plans | 12 | 172 |
Total defined benefit pension and defined contribution plans cost recognized in the Consolidated Income Statement | 152 | 90 |
U.S. Plans | Other Postretirement Benefits Plan | ||
Cost/(Income) of Pension Plans | ||
Service cost | 1 | 1 |
Interest cost | 27 | 29 |
Expected return on plan assets | 0 | 0 |
Amortization of prior service costs/(credits) | (7) | (7) |
Recognized actuarial losses | 0 | 0 |
Curtailments and settlements | 0 | 0 |
Total net periodic pension (income)/cost of defined benefit plans | 20 | 23 |
Non-U.S. Plans | Pension Plan | ||
Cost/(Income) of Pension Plans | ||
Service cost | 44 | 44 |
Interest cost | 267 | 288 |
Expected return on plan assets | (389) | (356) |
Amortization of prior service costs/(credits) | 5 | 5 |
Recognized actuarial losses | 130 | 102 |
Curtailments and settlements | 2 | (1) |
Multi-employer plans | 4 | 4 |
Other costs/(credits) | 8 | 9 |
Total net periodic pension (income)/cost of defined benefit plans | 72 | 95 |
Cost of defined contribution plans | 99 | 97 |
Total defined benefit pension and defined contribution plans cost recognized in the Consolidated Income Statement | 171 | 192 |
Non-U.S. Plans | Other Postretirement Benefits Plan | ||
Cost/(Income) of Pension Plans | ||
Service cost | 1 | 1 |
Interest cost | 11 | 9 |
Expected return on plan assets | 0 | (1) |
Amortization of prior service costs/(credits) | 0 | 0 |
Recognized actuarial losses | 0 | 0 |
Curtailments and settlements | 0 | 0 |
Total net periodic pension (income)/cost of defined benefit plans | $ 11 | $ 9 |
Retirement-Related Benefits -_2
Retirement-Related Benefits - Contributions (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Retirement-Related Benefits | ||
Total plan contributions | $ 103 | $ 117 |
Trust for Benefit of Employees | ||
Retirement-Related Benefits | ||
Contributions by employer - Noncash | 210 | 192 |
U.S. nonpension postretirement benefit plans | ||
Retirement-Related Benefits | ||
Total plan contributions | 89 | 109 |
Non-U.S. DB plans and multi-employer plans | ||
Retirement-Related Benefits | ||
Total plan contributions | 14 | 7 |
Other Postretirement Benefits Plan | U.S. nonpension postretirement benefit plans | ||
Retirement-Related Benefits | ||
Contributions by employer - Noncash | $ 89 | $ 109 |
Subsequent Events (Details)
Subsequent Events (Details) | Apr. 30, 2024 $ / shares |
Subsequent Event | |
Subsequent Event [Line Items] | |
Dividend declared (in dollars per share) | $ 1.67 |