Item 3. Legal Proceedings:

        Refer to note oN, "Contingencies and Commitments" on pages 6994 through 7196 of IBM's 20042007 Annual Report to Stockholders which is incorporated herein by reference.

Item 4. Submission of Matters to a Vote of Security Holders:

        Not applicable.

PART II

Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities:

        Refer to page 93pages 121 and 96124 of IBM's 20042007 Annual Report to Stockholders which are incorporated herein by reference solely as they relate to this item.

        IBM common stock is listed on the New York Stock Exchange Chicago Stock Exchange and PacificChicago Stock Exchange. There were 662,465583,774 common stockholders of record at February 10, 2005.8, 2008.

        Refer to Item 12, under the caption "Equity Compensation Plan Information" on pages 18 to 20, for additional information on the company's equity compensation plans.

        The following table provides information relating to the company's repurchase of common stock for the fourth quarter of 2004.2007.

(1)

On FebruaryApril 24, 2004,2007, the IBM Board of Directors authorized up to $4.0$15.0 billion in additional funds for use in the company's common stock repurchase program. This authorization was completely utilized before December 31, 2004. On October 26, 2004program; the Board of Directors authorized up to $4.0 billion in additional funds for use in its repurchase program. IBM has announcedcompany stated that under its repurchase program, it willmay repurchase shares on the open market or in private transactions, from time to time,including structured or accelerated transactions, depending on market conditions. See note M "Stockholders' Equity Activity" on pages 92 through 93 of IBM's 2007 Annual Report for additional information regarding the accelerated share repurchase agreements executed in the second quarter of 2007. The common stock repurchase program does not have an expiration date. As discussed in note M "Stockholders' Equity Activity" on pages 92 through 93 of IBM's 2007 Annual Report, the company does not expect the accelerated share repurchase agreements settlement periods to conclude until March 2008. On December 3, 2007, the company announced that it plans to repurchase up to $1 billion of its outstanding common stock in open market transactions by the end of February 2008. This table does not include shares tendered to satisfy the exercise price in connection with cashless exercises of employee stock options or shares tendered to satisfy tax withholding obligations in connection with employee equity awards.

(2)

The remaining authorization may be used for the settlement of the accelerated share repurchase agreements or additional common stock repurchases. As discussed in note M "Stockholders' Equity Activity" on pages 92 through 93 of IBM's 2007 Annual Report, the company elected to make a cash payment for the first and second settlements under the accelerated share repurchase agreements in September and December 2007, resulting in a reduction of $151.8 million and $253.1 million, respectively, to the remaining authorization.

Item 6. Selected Financial Data:

        Refer to pages 92120 and 93121 of IBM's 20042007 Annual Report to Stockholders which are incorporated herein by reference.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations:

        Refer to pages 1114 through 3955 of IBM's 20042007 Annual Report to Stockholders which are incorporated herein by reference.

Item 7A. Quantitative and Qualitative Disclosures About Market Risks:

        Refer to the section titled "Market Risk" on page 33pages 49 and 3450 of IBM's 20042007 Annual Report to Stockholders which is incorporated herein by reference.

Item 8. Financial Statements and Supplementary Data:

        Refer to pages 9, 10, and 4058 through 91119 of IBM's 20042007 Annual Report to Stockholders which are incorporated herein by reference. Also refer to the Financial Statement Schedule on page S-1 of this Form.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure:

        Not applicable.

Item 9A. Controls and Procedures:

Evaluation of Disclosure Controls and Procedures

        The company's management evaluated, with the participation of the Chief Executive Officer and Chief Financial Officer, the effectiveness of the company's disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by this report.

Internal Control Over Financial Reporting

        Refer to "Report of Management" and "Report of Independent Registered Public Accounting Firm" on pages 956 and 1057 of IBM's 20042007 Annual Report to Stockholders, which are incorporated herein by reference. There has been no change in the company's internal control over financial reporting that occurred during the fourth fiscal quarter that has materially affected, or is reasonably likely to material affect, the company's internal control over financial reporting.

Item 9B. Other InformationInformation:

        Not Applicable.

PART III

Item 10. Directors, and Executive Officers of the Registrant:and Corporate Governance:

        Refer to the information under the captions "Election of Directors for a Term of One Year," "Committees"General Information—Committees of the Board," "Audit Committee" and "Section 16(a) Beneficial Ownership Reporting Compliance" in IBM's definitive Proxy Statement to be filed with the Securities and Exchange Commission and delivered to stockholders in connection with the Annual Meeting of Stockholders to be held April 26, 2005,29, 2008, all of which information is incorporated herein by reference. Also refer to Item 2 entitled1 of this Form 10-K under the caption "Executive Officers of the Registrant" in Part I of this Form.Registrant (at February 22, 2008)" on page 9 for additional information on the company's executive officers.

Item 11. Executive Compensation:

        Refer to the information under the captions "Summary"General Information—2007 Director Compensation Narrative," "2007 Director Compensation Table," "Stock Option/SAR"2007 Compensation Discussion and Analysis," "2007 Summary Compensation Table Narrative," "2007 Summary Compensation Table," "2007 Grants in Last Fiscal Year,of Plan-Based Awards Table," "Aggregated Option/SAR Exercises in Last Fiscal Year and"2007 Outstanding Equity Awards at Fiscal Year-End Options/SAR Values,Narrative," "Long-Term Incentive Plans—"2007 Outstanding Equity Awards in Lastat Fiscal Year,Year-End Table," "Retirement Plans,"2007 Option Exercises and Stock Vested Table," "Other"2007 Retention Plan Narrative," "2007 Retention Plan Table," "2007 Pension Benefits Narrative," "2007 Pension Benefits Table," "2007 Nonqualified Deferred Compensation Plans,Narrative," "Directors'"2007 Nonqualified Deferred Compensation Table," "Employment Agreements"2007 Potential Payments Upon Termination Narrative," and Change-in-Control Arrangements,"2007 Potential Payments Upon Termination Table," "Report on"Compensation Committee Interlocks and Insider Participation" and "2007 Report of the Executive Compensation" and "Performance Graph"Management Resources Committee of the Board of Directors" in IBM's definitive Proxy Statement to be filed with the Securities and Exchange Commission and delivered to stockholders in connection with the Annual Meeting of Stockholders to be held April 26, 2005,29, 2008, all of which information is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters:

        Refer to the information under the captionscaption "Ownership of Securities," "Security Ownership of Certain Beneficial Owners," "CommonSecurities—Common Stock and Total Stock-basedStock-Based Holdings of Management,"Directors and "Equity Compensation Plan Information"Executive Officers" in IBM's definitive Proxy Statement to be filed with the Securities and Exchange Commission and delivered to stockholders in connection with the Annual Meeting of Stockholders to be held April 26, 2005,29, 2008, all of which information is incorporated herein by reference.

Equity Compensation Plan Information

n/a is not applicable

RSUs—Restricted Stock Units, including Retention Restricted Stock Units
PSUs—Performance Share Units
DCEAP Shares—Shares under the DCEAP (see plan description below)

(1)

In connection with 26 acquisition transactions, 2,090,910 additional options were outstanding as a result of the company's assumption of options granted by the acquired entities. The weighted-average exercise price of these options was $79. The company has not made, and will not make, any future grants or awards of equity securities under the plans of these acquired companies.

(2)

The numbers included for PSUs in column (a) above reflect the maximum number payout. Assuming target number payout, the number of securities to be issued upon the exercise of PSUs for equity compensation plans approved by security holders is 1,386,629 and for equity compensation plans not approved by security holders is 1,397,194. For additional information about PSUs, including payout calculations, refer to the information under "2007 Summary Compensation Table Narrative" in IBM's definitive Proxy Statement to be filed with the Securities and Exchange

Commission and delivered to stockholders in connection with the Annual Meeting of Stockholders to be held April 29, 2008.

        The material features of each equity compensation plan under which equity securities are authorized for issuance that was adopted without stockholder approval are described below:

2001 LONG—TERM PERFORMANCE PLAN

        The 2001 Long-Term Performance Plan (the "2001 Plan") is used to fund awards for employees other than senior executives of the company. Awards for senior executives of the company will continue to be funded from the stockholder-approved 1999 Long-Term Performance Plan (the "1999 Plan"). Otherwise, the provisions of the 2001 Plan are identical to the 1999 Plan, including the type of awards that may be granted under the plan (stock options, restricted stock unit awards and long-term performance incentive awards).

        The 2001 Plan is administered by the Executive Compensation and Management Resources Committee of the Board of Directors, and that Committee may delegate to officers of the company certain of its duties, powers and authority. Payment of awards may be made in the form of cash, stock or combinations thereof and may be deferred with Committee approval. Awards are not transferable or assignable except (i) by law, will or the laws of descent and distribution, (ii) as a result of the disability of the recipient, or (iii) with the approval of the Committee.

        If the employment of a participant terminates, other than as a result of the death or disability of the participant, all unexercised, deferred and unpaid Awards shall be canceled immediately, unless the Award Agreement provides otherwise. In the event of the death of a participant or in the event a participant is deemed by the company to be disabled and eligible for benefits under the terms of the IBM Long-Term Disability Plan (or any successor plan or similar plan of another employer), the participant's estate, beneficiaries or representative, as the case may be, shall have the rights and duties of the participant under the applicable Award Agreement. In addition, unless the Award Agreement specifies otherwise, the Committee may cancel, rescind, suspend, withhold or otherwise limit or restrict any unexpired, unpaid, or deferred Awards at any time if the participant is not in compliance with all applicable provisions of the Award Agreement and the Plan. In addition, Awards are cancelled if the participant engages in any conduct or act determined to be injurious, detrimental or prejudicial to any interest of the company.

PWCC ACQUISITION LONG—TERM PERFORMANCE PLAN

        The IBM PWCC Acquisition Long-Term Performance Plan (the "PWCC Plan") was adopted by the Board of Directors in connection with the company's acquisition of PricewaterhouseCoopers Consulting ("PwCC") from PricewaterhouseCoopers LLP, as announced on October 1, 2002. The PWCC Plan has been and will continue to be used solely to fund awards for employees of PwCC who have come over to the company as a result of the acquisition. Awards for senior executives of the company will not be funded from the PWCC Plan. The terms and conditions of the PWCC Plan are substantively identical to the terms and conditions of the 2001 Plan, described above.

IBM DEFERRED COMPENSATION AND EQUITY AWARD PLAN

        The IBM Deferred Compensation and Equity Award Plan (the "DCEAP") was adopted in 1993. Under the DCEAP, non-management directors receive Promised Fee Shares in connection with deferred annual retainer payments. Each Promised Fee Share is equal in value to one share of the company's common stock. Upon a director's retirement or other completion of service as a director, all amounts deferred into Promised Fee Shares are payable in either cash and/or shares of the company's stock at the director's election. (For additional information about the DCEAP, see 2007 Director Compensation Narrative in IBM's definitive Proxy Statement to be filed with the Securities and

Exchange Commission and delivered to stockholders in connection with the Annual Meeting of Stockholders to be held April 29, 2008).

Item 13. Certain Relationships and Related Transactions:Transactions, and Director Independence:

        Refer to the information under the caption "Othercaptions "General Information—Board of Directors" and "General Information—Certain Transactions and Relationships" in IBM's definitive Proxy Statement to be filed with the Securities and Exchange Commission and delivered to stockholders in connection with the Annual Meeting of Stockholders to be held April 26, 2005,29, 2008, which information is incorporated herein by reference.

Item 14. Principal AccountantAccounting Fees and Services:

        Refer to the information under the captions "Report of the Audit Committee of the Board of Directors" and "Audit and Non-Audit Fees" in IBM's definitive Proxy Statement to be filed with the Securities and Exchange Commission and delivered to stockholders in connection with the Annual Meeting of Stockholders to be held April 26, 2005,29, 2008, all of which information is incorporated herein by reference.

PART IV

Item 15. Exhibits, and Financial Statement Schedules:

(a)

The following documents are filed as part of this report:



1.

Financial statements from IBM's 20042007 Annual Report to Stockholders which are incorporated herein by reference:

Report of Independent Registered Public Accounting Firm (page 10)57).

Consolidated Statement of Earnings for the years ended December 31, 2004, 20032007, 2006 and 2002 (pages 40 and 41)2005 (page 58).

Consolidated Statement of Financial Position at December 31, 20042007 and 2003 (pages 42 and 43)2006 (page 59).

Consolidated Statement of Cash Flows for the years ended December 31, 2004, 20032007, 2006 and 2002 (pages 44 and 45)2005 (page 60).

Consolidated Statement of Stockholders' Equity at December 31, 2004, 20032007, 2006 and 20022005 (pages 4661 through 48)63).

Notes to Consolidated Financial Statements (pages 4964 through 91)119).

2.

Financial statement schedules required to be filed by Item 8 of this Form:

        All other schedules are omitted as the required matter is not present, the amounts are not significant or the information is shown in the Consolidated Financial Statements or the notes thereto.

3.

Exhibits:

        Included in this Form 10-K:

        Not included in this Form 10-K:

SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

        Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ON FINANCIAL STATEMENT SCHEDULE

To the Stockholders and Board of Directors of
International Business Machines Corporation:

        Our audits of the consolidated financial statements of management's assessment of the effectiveness of internal control over financial reporting and of the effectiveness of internal control over financial reporting referred to in our report dated February 22, 200526, 2008 appearing in the 20042007 Annual Report to Shareholders of International Business Machines Corporation (which report and consolidated financial statements and assessment are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the Financial Statement Schedule listed in Item 15(a)(2) of this Form 10-K. In our opinion, this Financial Statement Schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.

/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
New York, New York
February 22, 200526, 2008

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMSCHEDULE II

TO THE BOARD OF DIRECTORS OF
INTERNATIONAL BUSINESS MACHINES CORPORATION:

        We have audited the statements of assets and liabilities of the Business Consulting Services Reporting Unit (the "Reporting Unit") (a reporting unit as defined in Statement of Financial Accounting Standards No. 142), of International Business Machines Corporation (the "Company") as of December 31, 2004 and 2003 and the related statements of revenues and expenses (collectively, the "statements") for the years ended December 31, 2004 and 2003 and the three months ended December 31, 2002 (not separately presented herein). These statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these statements based on our audits.

        We conducted our audits in accordance with auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the statements. We believe that our audits provide a reasonable basis for our opinion.

        The statements were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (for use by the Company in connection with its various filings with the Commission). Certain corporate assets, liabilities and corporate expenses, that are not the responsibility of the Reporting Unit, and which have not been allocated, have been excluded from the statements. Accordingly, these statements are not intended to be a complete presentation of the financial position or results of operations of the Reporting Unit.

        In our opinion, the statements referred to above present fairly, in all material respects, the assets and liabilities of the Reporting Unit as of December 31, 2004 and 2003 and its revenues and expenses for the years ended December 31, 2004 and 2003 and for the three months ended December 31, 2002, in conformity with U.S. generally accepted accounting principles.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE BOARD OF DIRECTORS OF
INTERNATIONAL BUSINESS MACHINES CORPORATION

        We have examined management's assertion that the controls over the initiation and recording of revenue transactions and the recording of direct costs of the Business Consulting Services Reporting Unit ("the Reporting Unit") (a reporting unit as defined in Statement of Financial Accounting Standards No. 142), of International Business Machines Corporation ("IBM") are effective, as of December 31, 2004. Management is responsible for its controls over the initiation and recording of revenue transactions and the recording of direct costs of the Reporting Unit. Our responsibility is to express an opinion on management's assertion based on our examination.

        The control objectives that formed the basis for management's assertion included (1) credit checks, contract pricing, contract terms and conditions, and a valid signed contract are obtained, reviewed and approved, and non-standard contract terms and conditions are identified for review prior to revenue recognition; (2) invoices are generated based on contract terms and conditions and reviewed prior to issuance; (3) revenues and accounts receivable are monitored and appropriate adjustments are made timely; (4) costs are appropriately and timely captured by contract and business unit and reconciled with related revenues; and (5) losses on contracts are identified and appropriate provisions made based on established accounting policies.

        Our examination was conducted in accordance with attestation standards adopted by the Public Company Accounting Oversight Board (United States) and, accordingly, included obtaining an understanding of the controls over the initiation and recording of revenue transactions and the recording of direct costs of the Reporting Unit, testing and evaluating the design and operating effectiveness of those controls, and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion.

        Our examination was limited to those controls that are applied to individual revenue transactions that are initiated within the Reporting Unit, and to those controls that are applied to the direct costs by Reporting Unit personnel. Our examination did not extend to IBM's internal control over financial reporting as it relates to applications and controls that are common to all reporting units within IBM, or to IBM entity-level controls, including those that also affect the recording of the Reporting Unit's revenues and direct costs.

        Because of inherent limitations in any internal control, misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the controls over the initiation and recording of revenue transactions and the recording of direct costs of the Reporting Unit to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the controls may deteriorate.

        In our opinion, management's assertion that the controls over the initiation and recording of revenue transactions and the recording of direct costs of the Reporting Unit are effective as of December 31, 2004, is fairly stated in all material respects, based on the control objectives described above.

SCHEDULE II

INTERNATIONAL BUSINESS MACHINES CORPORATION AND SUBSIDIARY COMPANIES
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
For the Years Ended December 31:
(Dollars in Millions)

(A)*

Additions for Allowance for Doubtful Accounts and Allowance for Inventory Losses are charged to expense and cost accounts, respectively, while Revenue Based Provisions are charged to revenue accounts.

**

Primarily comprises currency translation adjustments.

EXHIBIT INDEX

*

Management contract or compensatory plan or arrangement.

**

The Performance Graphs, set forth on page 122 of IBM's 2007 Annual Report to Stockholders, are deemed to be furnished but not filed.

QuickLinks

Item 1A. Risk Factors

Item 1B. Unresolved Staff Comments
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holders

Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Item 6. Selected Financial Data
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risks
Item 8. Financial Statements and Supplementary Data
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A. Controls and Procedures
Item 9B. Other Information

Item 10. Directors, Executive Officers and Corporate Governance
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13. Certain Relationships and Related Transactions, and Director Independence
Item 14. Principal Accounting Fees and Services

Item 15. Exhibits, Financial Statement Schedules

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMSCHEDULE II
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM