Cover
Cover - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 09, 2024 | Jun. 30, 2023 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 1-2360 | ||
Entity Registrant Name | INTERNATIONAL BUSINESS MACHINES CORPORATION | ||
Entity Incorporation, State or Country Code | NY | ||
Entity Address, Address Line One | One New Orchard Road | ||
Entity Address, City or Town | Armonk | ||
Entity Address, State or Province | NY | ||
Entity Tax Identification Number | 13-0871985 | ||
Entity Address, Postal Zip Code | 10504 | ||
City Area Code | 914 | ||
Local Phone Number | 499-1900 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 121.9 | ||
Entity Common Stock, Shares Outstanding | 916,744,848 | ||
Documents Incorporated by Reference | Portions of IBM’s Annual Report to Stockholders for the year ended December 31, 2023 are incorporated by reference into Parts I, II and IV of this Form 10-K. Portions of IBM’s definitive Proxy Statement to be filed with the Securities and Exchange Commission and delivered to stockholders in connection with the Annual Meeting of Stockholders to be held April 30, 2024 are incorporated by reference into Part III of this Form 10-K. | ||
Entity Central Index Key | 0000051143 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
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 $.20 per share | ||
Trading Symbol | IBM | ||
Security Exchange Name | CHX |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Firm ID | 238 |
Auditor Location | New York, New York |
CONSOLIDATED INCOME STATEMENT
CONSOLIDATED INCOME STATEMENT - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |||
Revenue | $ 61,860 | $ 60,530 | $ 57,350 | ||
Cost | 27,560 | 27,842 | 25,865 | ||
Gross profit | 34,300 | 32,687 | 31,486 | ||
Expense and other (income) | |||||
Selling, general and administrative | 19,003 | 18,609 | 18,745 | ||
Research, development and engineering | 6,775 | 6,567 | 6,488 | ||
Intellectual property and custom development income | (860) | (663) | (612) | ||
Other (income) and expense | (914) | 5,803 | 873 | ||
Interest expense | 1,607 | 1,216 | 1,155 | ||
Total expense and other (income) | 25,610 | 31,531 | 26,649 | ||
Income from continuing operations before income taxes | 8,690 | 1,156 | 4,837 | ||
Provision for/(benefit from) income taxes | 1,176 | (626) | 124 | ||
Income from continuing operations | 7,514 | 1,783 | 4,712 | ||
Income/(loss) from discontinued operations, net of tax | (12) | (143) | 1,030 | ||
Net income | $ 7,502 | $ 1,639 | [1] | $ 5,743 | [2] |
Assuming dilution | |||||
Continuing operations (in dollars per share) | $ 8.15 | $ 1.95 | $ 5.21 | ||
Discontinued operations (in dollars per share) | (0.01) | (0.16) | 1.14 | ||
Total (in dollars per share) | 8.14 | 1.80 | 6.35 | ||
Basic | |||||
Continuing operations (in dollars per share) | 8.25 | 1.97 | 5.26 | ||
Discontinued operations (in dollars per share) | (0.01) | (0.16) | 1.15 | ||
Total (in dollars per share) | $ 8.23 | $ 1.82 | $ 6.41 | ||
Weighted-average number of common shares outstanding | |||||
Assuming dilution (in shares) | 922,073,828 | 912,269,062 | 904,641,001 | ||
Basic (in shares) | 911,210,319 | 902,664,190 | 895,990,771 | ||
Services | |||||
Revenue | $ 30,378 | $ 30,206 | $ 29,225 | ||
Cost | 21,051 | 21,062 | 19,147 | ||
Sales | |||||
Revenue | 30,745 | 29,673 | 27,346 | ||
Cost | 6,127 | 6,374 | 6,184 | ||
Financing | |||||
Revenue | 737 | 651 | 780 | ||
Cost | $ 382 | $ 406 | $ 534 | ||
[1]2022 includes the impact of a one-time, non-cash pension settlement charge. Refer to note V, “Retirement-Related Benefits,” for additional information . Amounts presented have not been recast to exclude discontinued operations. |
CONSOLIDATED STATEMENT OF COMPR
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | [2] | ||
Statement of Comprehensive Income [Abstract] | |||||
Net income | $ 7,502 | $ 1,639 | [1] | $ 5,743 | |
Other comprehensive income/(loss), before tax | |||||
Foreign currency translation adjustments | 3 | 176 | 987 | ||
Net changes related to available-for-sale securities | |||||
Unrealized gains/(losses) arising during the period | 0 | (1) | 0 | ||
Reclassification of (gains)/losses to net income | 0 | 0 | 0 | ||
Total net changes related to available-for-sale securities | 0 | (1) | 0 | ||
Unrealized gains/(losses) on cash flow hedges | |||||
Unrealized gains/(losses) arising during the period | 207 | 241 | 344 | ||
Reclassification of (gains)/losses to net income | (159) | (400) | 243 | ||
Total unrealized gains/(losses) on cash flow hedges | 47 | (158) | 587 | ||
Retirement-related benefit plans | |||||
Prior service costs/(credits) | 2 | 463 | (51) | ||
Net (losses)/gains arising during the period | (3,115) | 878 | 2,433 | ||
Curtailments and settlements | 5 | 5,970 | 94 | ||
Amortization of prior service (credits)/costs | (9) | 12 | 9 | ||
Amortization of net (gains)/losses | 515 | 1,596 | 2,484 | ||
Total retirement-related benefit plans | (2,602) | 8,919 | 4,969 | ||
Other comprehensive income/(loss), before tax | (2,552) | 8,936 | 6,542 | ||
Income tax (expense)/benefit related to items of other comprehensive income | 531 | (2,442) | (1,703) | ||
Other comprehensive income/(loss) | (2,021) | 6,494 | 4,839 | ||
Total comprehensive income | $ 5,481 | $ 8,134 | $ 10,582 | ||
[1]2022 includes the impact of a one-time, non-cash pension settlement charge. Refer to note V, “Retirement-Related Benefits,” for additional information . Amounts presented have not been recast to exclude discontinued operations. |
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 13,068 | $ 7,886 |
Restricted cash | 21 | 103 |
Marketable securities | 373 | 852 |
Notes and accounts receivable—trade (net of allowances of $192 in 2023 and $233 in 2022) | 7,214 | 6,541 |
Short-term financing receivables | ||
Held for investment (net of allowances of $129 in 2023 and $145 in 2022) | 6,102 | 6,851 |
Held for sale | 692 | 939 |
Other accounts receivable (net of allowances of $109 in 2023 and $89 in 2022) | 640 | 817 |
Inventory | 1,161 | 1,552 |
Deferred costs | 998 | 967 |
Prepaid expenses and other current assets | 2,639 | 2,611 |
Total current assets | 32,908 | 29,118 |
Property, plant and equipment | 18,122 | 18,695 |
Less: Accumulated depreciation | 12,621 | 13,361 |
Property, plant and equipment—net | 5,501 | 5,334 |
Operating right-of-use assets—net | 3,220 | 2,878 |
Long-term financing receivables (net of allowances of $27 in 2023 and $28 in 2022) | 5,766 | 5,806 |
Prepaid pension assets | 7,506 | 8,236 |
Deferred costs | 842 | 866 |
Deferred taxes | 6,656 | 6,256 |
Goodwill | 60,178 | 55,949 |
Intangible assets—net | 11,036 | 11,184 |
Investments and sundry assets | 1,626 | 1,617 |
Total assets | 135,241 | 127,243 |
Current liabilities | ||
Taxes | 2,270 | 2,196 |
Short-term debt | 6,426 | 4,760 |
Accounts payable | 4,132 | 4,051 |
Compensation and benefits | 3,501 | 3,481 |
Deferred income | 13,451 | 12,032 |
Operating lease liabilities | 820 | 874 |
Other accrued expenses and liabilities | 3,521 | 4,111 |
Total current liabilities | 34,122 | 31,505 |
Long-term debt | 50,121 | 46,189 |
Retirement and nonpension postretirement benefit obligations | 10,808 | 9,596 |
Deferred income | 3,533 | 3,499 |
Operating lease liabilities | 2,568 | 2,190 |
Other liabilities | 11,475 | 12,243 |
Total liabilities | 112,628 | 105,222 |
Commitments and Contingencies | ||
IBM stockholders' equity | ||
Common stock | 59,643 | 58,343 |
Retained earnings | 151,276 | 149,825 |
Treasury stock, at cost (shares: 2023—1,351,897,514; 2022—1,351,024,943) | (169,624) | (169,484) |
Accumulated other comprehensive income/(loss) | (18,761) | (16,740) |
Total IBM stockholders' equity | 22,533 | 21,944 |
Noncontrolling interests | 80 | 77 |
Total equity | 22,613 | 22,021 |
Total liabilities and equity | $ 135,241 | $ 127,243 |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Notes and accounts receivable - trade, allowances | $ 192 | $ 233 |
Short-term financing receivables - held for investment, allowances | 129 | 145 |
Other accounts receivable, allowances | 109 | 89 |
Long-term financing receivables, allowances | $ 27 | $ 28 |
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) | 2,266,911,160 | 2,257,116,920 |
Treasury stock, Shares (in shares) | 1,351,897,514 | 1,351,024,943 |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||||
Cash flows from operating activities | ||||||
Net income | $ 7,502 | $ 1,639 | [1] | $ 5,743 | [2] | |
Adjustments to reconcile net income to cash provided by operating activities | ||||||
Pension settlement charge | 0 | 5,894 | 0 | |||
Depreciation | [3] | 2,109 | 2,407 | 3,888 | ||
Amortization of capitalized software and acquired intangible assets | 2,287 | 2,395 | 2,529 | |||
Stock-based compensation | 1,133 | 987 | 982 | |||
Deferred taxes | (1,114) | (2,726) | (2,001) | |||
Net (gain)/loss on asset sales and other | [4] | (170) | (363) | (136) | ||
Change in operating assets and liabilities, net of acquisitions/divestitures | ||||||
Receivables (including financing receivables) | 725 | (539) | 1,372 | |||
Retirement related | (462) | 331 | 1,038 | |||
Inventory | 390 | 71 | 138 | |||
Other assets/other liabilities | [4] | 1,466 | 126 | (842) | ||
Accounts payable | 65 | 213 | 85 | |||
Net cash provided by operating activities | 13,931 | 10,435 | 12,796 | |||
Cash flows from investing activities | ||||||
Payments for property, plant and equipment | (1,245) | (1,346) | (2,062) | |||
Proceeds from disposition of property, plant and equipment | 321 | 111 | 387 | |||
Investment in software | (565) | (626) | (706) | |||
Purchases of marketable securities and other investments | (11,143) | (5,930) | (3,561) | |||
Proceeds from disposition of marketable securities and other investments | 10,647 | 4,665 | 3,147 | |||
Acquisition of businesses, net of cash acquired | (5,082) | (2,348) | (3,293) | |||
Divestiture of businesses, net of cash transferred | (4) | 1,272 | 114 | |||
Net cash provided by/(used in) investing activities | (7,070) | (4,202) | (5,975) | |||
Cash flows from financing activities | ||||||
Proceeds from new debt | 9,586 | 7,804 | 522 | |||
Payments to settle debt | (5,082) | (6,800) | (8,597) | |||
Short-term borrowings/(repayments) less than 90 days—net | (7) | 217 | (40) | |||
Common stock repurchases for tax withholdings | (402) | (407) | (319) | |||
Financing—other | 176 | 176 | 70 | |||
Distribution from Kyndryl | 0 | 0 | 879 | [5] | ||
Cash dividends paid | (6,040) | (5,948) | (5,869) | |||
Net cash provided by/(used in) financing activities | (1,769) | (4,958) | (13,354) | |||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 9 | (244) | (185) | |||
Net change in cash, cash equivalents and restricted cash | 5,101 | 1,032 | (6,718) | |||
Cash, cash equivalents and restricted cash at January 1 | 7,988 | 6,957 | 13,675 | |||
Cash, cash equivalents and restricted cash at December 31 | 13,089 | 7,988 | 6,957 | |||
Supplemental data | ||||||
Income taxes paid—net of refunds received | 1,564 | 1,865 | 2,103 | |||
Interest paid on debt | $ 1,668 | $ 1,401 | $ 1,512 | |||
[1]2022 includes the impact of a one-time, non-cash pension settlement charge. Refer to note V, “Retirement-Related Benefits,” for additional information . Amounts presented have not been recast to exclude discontinued operations. |
CONSOLIDATED STATEMENT OF CAS_2
CONSOLIDATED STATEMENT OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Statement of Cash Flows [Abstract] | ||
Operating lease right-of-use assets amortization expense | $ 900 | $ 900 |
Distribution from Kyndryl | $ 0 | $ 0 |
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, 2020 | $ 20,727 | $ 20,597 | $ 56,556 | $ 162,717 | $ (169,339) | $ (29,337) | $ 129 | ||
Net income plus other comprehensive income/(loss) | |||||||||
Net income | 5,743 | [1] | 5,743 | 5,743 | |||||
Other comprehensive income/(loss) | 4,839 | [1] | 4,839 | 4,839 | |||||
Total comprehensive income | 10,582 | [1] | 10,582 | ||||||
Cash dividends paid - common stock | (5,869) | (5,869) | (5,869) | ||||||
Common stock issued under employee plans | 762 | 762 | 762 | ||||||
Purchases and sales of treasury stock under employee plans - net | (31) | (31) | 22 | (53) | |||||
Separation of Kyndryl | [2] | (7,203) | (7,140) | (8,404) | 1,264 | (62) | |||
Changes in noncontrolling interests | 28 | 28 | |||||||
Balance at the end of the period at Dec. 31, 2021 | 18,996 | 18,901 | 57,319 | 154,209 | (169,392) | (23,234) | 95 | ||
Net income plus other comprehensive income/(loss) | |||||||||
Net income | 1,639 | [3] | 1,639 | 1,639 | |||||
Other comprehensive income/(loss) | 6,494 | 6,494 | 6,494 | ||||||
Total comprehensive income | 8,134 | 8,134 | |||||||
Cash dividends paid - common stock | (5,948) | (5,948) | (5,948) | ||||||
Common stock issued under employee plans | 962 | 962 | 962 | ||||||
Purchases and sales of treasury stock under employee plans - net | (104) | (104) | (12) | (92) | |||||
Other equity | 0 | 0 | 63 | (63) | |||||
Changes in noncontrolling interests | (18) | (18) | |||||||
Balance at the end 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 | 7,502 | 7,502 | 7,502 | ||||||
Other comprehensive income/(loss) | (2,021) | (2,021) | (2,021) | ||||||
Total comprehensive income | 5,481 | 5,481 | |||||||
Cash dividends paid - common stock | (6,040) | (6,040) | (6,040) | ||||||
Common stock issued under employee plans | 1,300 | 1,300 | 1,300 | ||||||
Purchases and sales of treasury stock under employee plans - net | (152) | (152) | (11) | (140) | |||||
Changes in noncontrolling interests | 3 | 3 | |||||||
Balance at the end of the period at Dec. 31, 2023 | $ 22,613 | $ 22,533 | $ 59,643 | $ 151,276 | $ (169,624) | $ (18,761) | $ 80 | ||
[1] Amounts presented have not been recast to exclude discontinued operations. Refer to note E, "Acquisitions & Divestitures," for additional information. . |
CONSOLIDATED STATEMENT OF EQU_2
CONSOLIDATED STATEMENT OF EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Stockholders' Equity [Abstract] | |||
Cash dividend per common share (in dollars per share) | $ 6.63 | $ 6.59 | $ 6.55 |
Common stock issued under employee plans (in shares) | 9,794,240 | 8,539,072 | 5,608,845 |
Purchases of treasury stock under employee plans (in shares) | 2,953,554 | 3,027,994 | 2,286,912 |
Sales of treasury stock under employee plans (in shares) | 2,080,983 | 2,512,300 | 2,093,243 |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | SIGNIFICANT ACCOUNTING POLICIES 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). 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-year amounts have been reclassified to conform to the change in current year presentation. This is annotated where applicable. On November 3, 2021 we completed the separation of our managed infrastructure services unit into a new public company, Kyndryl. The accounting requirements for reporting the separation of Kyndryl as a discontinued operation were met when the separation was completed. Accordingly, the historical results of Kyndryl are presented as discontinued operations and, as such, have been excluded from continuing operations and segment results for all periods presented. Refer to note E, “Acquisitions & Divestitures,” for additional information. In September 2022, the IBM Qualified Personal Pension Plan (Qualified PPP) purchased two separate nonparticipating single premium group annuity contracts from The Prudential Insurance Company of America and Metropolitan Life Insurance Company (collectively, the Insurers) and irrevocably transferred to the Insurers approximately $16 billion of the Qualified PPP’s defined benefit pension obligations and related plan assets, thereby reducing the company’s pension obligations and assets by the same amount. The group annuity contracts were purchased using assets of the Qualified PPP and no additional funding contribution was required from the company. As a result of this transaction the company recognized a one-time, non-cash, pre-tax pension settlement charge of $5.9 billion ($4.4 billion net of tax) in the third quarter of 2022, primarily related to the accelerated recognition of accumulated actuarial losses of the Qualified PPP. The $1.5 billion tax effect associated with the settlement charge is reflected as an adjustment to reconcile net income to net cash provided by operating activities within deferred taxes in the Consolidated Statement of Cash Flows for the year ended December 31, 2022. Refer to note V, “Retirement-Related Benefits,” for additional information. In the fourth quarter of 2022, the company completed its annual assessment of the useful lives of its information technology equipment. Due to advances in technology, the company determined it should increase the estimated useful lives of its server and network equipment from five three The company reported a provision for income taxes of $1,176 million for the year ended December 31, 2023. The company reported a benefit from income taxes of $626 million for the year ended December 31, 2022. This tax benefit was primarily due to the transfer of a portion of the Qualified PPP’s defined benefit pension obligations and related plan assets, as described above. Refer to note H, “Taxes,” for additional information. Noncontrolling interest amounts of $16 million, $20 million and $19 million, net of tax, for the years ended December 31, 2023, 2022 and 2021, respectively, are included as a reduction within other (income) and expense in the Consolidated Income Statement. Principles of Consolidation The Consolidated Financial Statements include the accounts of IBM and its controlled subsidiaries, which are primarily majority owned. Any noncontrolling interest in the equity of a subsidiary is reported as a component of total equity in the Consolidated Balance Sheet. Net income and losses attributable to the noncontrolling interest is reported as described above in the Consolidated Income Statement. The accounts of variable interest entities (VIEs) are included in the Consolidated Financial Statements, if required. Investments in business entities in which the company does not have control but has the ability to exercise significant influence over operating and financial policies, are accounted for using the equity method and the company’s proportionate share of income or loss is recorded in other (income) and expense. At December 31, 2023 and 2022, equity method investments were $125 million and $142 million, respectively. Equity investments in non-publicly traded entities lacking controlling financial interest or significant influence are primarily measured at cost, absent other indicators of fair value, net of impairment, if any. At December 31, 2023 and 2022, equity investments measured at cost were $131 million and $63 million, respectively. Equity method investments and equity investments measured at cost are included in investments and sundry assets in the Consolidated Balance Sheet. The accounting policy for other investments in equity securities is described within the “Marketable Securities” section of this note. All intercompany transactions and accounts have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts that are reported in the Consolidated Financial Statements and accompanying disclosures. Estimates are made for the following, among others: revenue, costs to complete service contracts, income taxes, pension assumptions, valuation of assets including goodwill and intangible assets, loss contingencies, allowance for credit losses and other matters. 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. Actual results may be different from these estimates. Revenue The company accounts for a contract with a client when it has written approval, the contract is committed, the rights of the parties, including payment terms, are identified, the contract has commercial substance and consideration is probable of collection. Revenue is recognized when, or as, control of a promised product or service transfers to a client, in an amount that reflects the consideration to which the company expects to be entitled in exchange for transferring those products or services. If the consideration promised in a contract includes a variable amount, the company estimates the amount to which it expects to be entitled using either the expected value or most likely amount method. The company’s contracts may include terms that could cause variability in the transaction price, including, for example, rebates, volume discounts, service-level penalties, and performance bonuses or other forms of contingent revenue. The company only includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The company may not be able to reliably estimate contingent revenue in certain long-term arrangements due to uncertainties that are not expected to be resolved for a long period of time or when the company’s experience with similar types of contracts is limited. The company’s arrangements infrequently include contingent revenue. Changes in estimates of variable consideration are included in note C, “Revenue Recognition.” The company’s standard billing terms are that payment is due upon receipt of invoice, payable within 30 days. Invoices are generally issued as control transfers and/or as services are rendered. Additionally, in determining the transaction price, the company adjusts the promised amount of consideration for the effects of the time value of money if the billing terms are not standard and the timing of payments agreed to by the parties to the contract provide the client or the company with a significant benefit of financing, in which case the contract contains a significant financing component. As a practical expedient, the company does not account for significant financing components if the period between when the company transfers the promised product or service to the client and when the client pays for that product or service will be one year or less. Most arrangements that contain a financing component are financed through the company’s Financing business and include explicit financing terms. The company may include subcontractor services or third-party vendor equipment or software in certain integrated services arrangements. In these types of arrangements, revenue from sales of third-party vendor products or services is recorded net of costs when the company is acting as an agent between the client and the vendor, and gross when the company is the principal for the transaction. To determine whether the company is an agent or principal, the company considers whether it obtains control of the products or services before they are transferred to the customer. In making this evaluation, several factors are considered, most notably whether the company has primary responsibility for fulfillment to the client, as well as inventory risk and pricing discretion. The company recognizes revenue on sales to solution providers, resellers and distributors (herein referred to as resellers) when the reseller has economic substance apart from the company and the reseller is considered the principal for the transaction with the end-user client. The company reports revenue net of any revenue-based taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue-producing transactions. In addition to the aforementioned general policies, the following are the specific revenue recognition policies for arrangements with multiple performance obligations and for each major category of revenue. Arrangements with Multiple Performance Obligations The company’s global capabilities as a hybrid cloud platform and AI company include services, software, hardware and related financing. The company enters into revenue arrangements that may consist of any combination of these products and services based on the needs of its clients. The company continues to develop new products and offerings and their associated consumption and delivery methods, including the use of cloud and as-a-Service models. These are not separate businesses; they are offerings across the segments that address market opportunities in areas such as analytics, data, cloud, security, AI and sustainability. Revenue from these offerings follows the specific revenue recognition policies for arrangements with multiple performance obligations and for each major category of revenue, depending on the type of offering, which are comprised of services, software and/or hardware. To the extent that a product or service in multiple performance obligation arrangements is subject to other specific accounting guidance, such as leasing guidance, that product or service is accounted for in accordance with such specific guidance. For all other products or services in these arrangements, the company determines if the products or services are distinct and allocates the consideration to each distinct performance obligation on a relative standalone selling price basis. When products and services are not distinct, the company determines an appropriate measure of progress based on the nature of its overall promise for the single performance obligation. The revenue policies in the Services, Hardware and/or Software sections below are applied to each performance obligation, as applicable. Services The company’s primary services offerings include consulting services, including business transformation; technology consulting and application operations including the design and development of complex IT environments to a client’s specifications (e.g., design and build); cloud services; business process outsourcing; and infrastructure support. Many of these services can be delivered entirely or partially through cloud or as-a-Service delivery models. The company’s services are provided on a time-and-material basis, as a fixed-price contract or as a fixed-price per measure of output contract and the contract terms generally range from less than one year to 5 years. In services arrangements, the company typically satisfies the performance obligation and recognizes revenue over time. In design and build arrangements, the performance obligation is satisfied over time either because the client controls the asset as it is created (e.g., when the asset is built at the customer site) or because the company’s performance does not create an asset with an alternative use and the company has an enforceable right to payment plus a reasonable profit for performance completed to date. In most other services arrangements, the performance obligation is satisfied over time because the client simultaneously receives and consumes the benefits provided as the company performs the services. Revenue from time-and-material contracts is recognized on an output basis as labor hours are delivered and/or direct expenses are incurred. Revenue from as-a-Service type contracts, such as Infrastructure-as-a-Service, is recognized either on a straight-line basis or on a usage basis, depending on the terms of the arrangement (such as whether the company is standing ready to perform or whether the contract has usage-based metrics). If an as-a-Service contract includes setup activities, those promises in the arrangement are evaluated to determine if they are distinct. In areas such as application management, business process outsourcing and other cloud-based services arrangements, the company determines whether the services performed during the initial phases of the arrangement, such as setup activities, are distinct. In most cases, the arrangement is a single performance obligation comprised of a series of distinct services that are substantially the same and that have the same pattern of transfer (i.e., distinct days of service). The company applies a measure of progress (typically time-based) to any fixed consideration and allocates variable consideration to the distinct periods of service based on usage. As a result, revenue is generally recognized over the period the services are provided on a usage basis. This results in revenue recognition that corresponds with the value to the client of the services transferred to date relative to the remaining services promised. Revenue related to maintenance and technology lifecycle support and extended warranty is recognized on a straight-line basis over the period of performance because the company is standing ready to provide services. In design and build contracts, revenue is recognized based on progress toward completion of the performance obligation using a cost-to-cost measure of progress. Revenue is recognized based on the labor costs incurred to date as a percentage of the total estimated labor costs to fulfill the contract. Due to the nature of the work performed in these arrangements, the estimation of cost at completion is complex, subject to many variables and requires significant judgment. Key factors reviewed by the company to estimate costs to complete each contract are future labor and product costs and expected productivity efficiencies. Changes in original estimates are reflected in revenue on a cumulative catch-up basis in the period in which the circumstances that gave rise to the revision become known by the company. Refer to note C, “Revenue Recognition,” for the amount of revenue recognized in the reporting period on a cumulative catch-up basis (i.e., from performance obligations satisfied, or partially satisfied, in previous periods). The company performs ongoing profitability analyses of its design and build services contracts accounted for using a cost-to-cost measure of progress in order to determine whether the latest estimates of revenues, costs and profits require updating. If at any time these estimates indicate that the contract will be unprofitable, the entire estimated loss for the remainder of the contract is recorded immediately. For other types of services contracts, any losses are recorded as incurred. In some services contracts, the company bills the client prior to recognizing revenue from performing the services. Deferred income of $3,444 million and $3,241 million at December 31, 2023 and 2022, respectively, is included in the Consolidated Balance Sheet. In other services contracts, the company performs the services prior to billing the client. When the company performs services prior to billing the client in design and build contracts, the right to consideration is typically subject to milestone completion or client acceptance and the unbilled accounts receivable is classified as a contract asset. At December 31, 2023 and 2022, contract assets for services contracts of $420 million and $426 million, respectively, are included in prepaid expenses and other current assets in the Consolidated Balance Sheet. The remaining amount of unbilled accounts receivable of $816 million and $788 million at December 31, 2023 and 2022, respectively, is included in notes and accounts receivable–trade in the Consolidated Balance Sheet. Billings usually occur in the month after the company performs the services or in accordance with specific contractual provisions. Hardware The company’s hardware offerings include the sale or lease of Hybrid Infrastructure solutions including zSystems as well as Distributed Infrastructure solutions such as Power and Storage solutions. The capabilities of these products can also be delivered through as-a-Service or cloud delivery models, such as Infrastructure-as-a-Service and Storage-as-a-Service. The company also offers installation services for its more complex hardware products. Hardware offerings are often sold with distinct maintenance services, described in the Services section above. Revenue from hardware sales is recognized when control has transferred to the customer which typically occurs when the hardware has been shipped to the client, risk of loss has transferred to the client and the company has a present right to payment for the hardware. In limited circumstances when a hardware sale includes client acceptance provisions, revenue is recognized either when client acceptance has been obtained, client acceptance provisions have lapsed, or the company has objective evidence that the criteria specified in the client acceptance provisions have been satisfied. Revenue from hardware sales-type leases is recognized at the beginning of the lease term. Revenue from rentals and operating leases is recognized on a straight-line basis over the term of the rental or lease. Revenue from as-a-Service arrangements is recognized either on a straight-line basis or on a usage basis as described in the Services section above. Installation services are accounted for as distinct performance obligations with revenue recognized as the services are performed. Shipping and handling activities that occur after the client has obtained control of a product are accounted for as an activity to fulfill the promise to transfer the product rather than as an additional promised service and, therefore, no revenue is deferred and recognized over the shipping period. Software The company’s software offerings include hybrid platform software solutions, which contain many of the company’s strategic areas including Red Hat, automation, data and AI, security and sustainability; transaction processing, which primarily supports mission-critical systems for clients; and distributed infrastructure software, which provides operating systems for zSystems and Power Systems hardware. These offerings include proprietary software and open-source software, and many can be delivered entirely or partially through as-a-Service or cloud delivery models, while others are delivered as on-premise software licenses. Revenue from proprietary perpetual (one-time charge) license software is recognized at a point in time at the inception of the arrangement when control transfers to the client, if the software license is distinct from the post-contract support (PCS) offered by the company. Revenue from proprietary term license software is recognized at a point in time for the committed term of the contract, unless consideration depends on client usage, in which case revenue is recognized when the usage occurs. Proprietary term licenses often have a one-month contract term due to client termination rights, in which case, revenue would be recognized in that month for both the license and PCS. Clients may contract to convert their existing IBM term license software into perpetual license software plus PCS. When proprietary term license software is converted to perpetual license software, the consideration becomes fixed with no cancellability and, therefore, revenue for the perpetual license is recognized upon conversion, consistent with the accounting for other perpetual licenses, as described above. PCS revenue is recognized as described below. The company also has open-source software offerings. Since open-source software is offered under an open-source licensing model and therefore, the license is available for free, the standalone selling price is zero. As such, when the license is sold with PCS or other products and services, no consideration is allocated to the license when it is a distinct performance obligation and therefore no revenue is recognized when control of the license transfers to the client. Revenue is recognized over the PCS period. In certain cases, open-source software is bundled with proprietary software and, if the open-source software is not considered distinct, the software bundle is accounted for under a proprietary software model. Revenue from PCS is recognized over the contract term on a straight-line basis because the company is providing a service of standing ready to provide support, when-and-if needed, and is providing unspecified software upgrades on a when-and-if available basis over the contract term. Revenue from software hosting or Software-as-a-Service (SaaS) arrangements is recognized either on a straight-line basis or on a usage basis as described in the Services section above. In software hosting arrangements, the rights provided to the client (e.g., ownership of a license, contract termination provisions and the feasibility of the client to operate the software) are considered in determining whether the arrangement includes a license. In arrangements that include a software license, the associated revenue is recognized in accordance with the software license recognition policy above rather than over time as a service. Financing Financing income attributable to sales-type leases, direct financing leases and loans is recognized on the accrual basis using the effective interest method. Operating lease income Standalone Selling Price The company allocates the transaction price to each performance obligation on a relative standalone selling price basis. The standalone selling price (SSP) is the price at which the company would sell a promised product or service separately to a client. In most cases, the company is able to establish SSP based on the observable prices of products or services sold separately in comparable circumstances to similar clients. The company typically establishes SSP ranges for its products and services which are reassessed on a periodic basis or when facts and circumstances change. In certain instances, the company may not be able to establish a SSP range based on observable prices, and as a result, the company estimates SSP. The company estimates SSP by considering multiple factors including, but not limited to, overall market conditions, including geographic or regional specific factors, internal costs, profit objectives and pricing practices. Additionally, in certain circumstances, the company may estimate SSP for a product or service by applying the residual approach. Estimating SSP is a formal process that includes review and approval by the company’s management. Services Costs Recurring operating costs for services contracts are recognized as incurred. For fixed-price design and build contracts, the costs of external hardware and software accounted for under the cost-to-cost measure of progress are deferred and recognized based on the labor costs incurred to date (i.e., the measure of progress), as a percentage of the total estimated labor costs to fulfill the contract as control transfers over time for these performance obligations. Certain eligible, non-recurring costs (i.e., setup costs) incurred in the initial phases of business process outsourcing contracts and other cloud-based services contracts, including Software-as-a-Service arrangements, are capitalized when the costs relate directly to the contract, the costs generate or enhance resources of the company that will be used in satisfying the performance obligation in the future, and the costs are expected to be recovered. These costs consist of transition and setup costs related to the provisioning, configuring, implementation and training and other deferred fulfillment costs, including, for example, prepaid assets used in services contracts (i.e., prepaid software or prepaid maintenance). Capitalized costs are amortized on a straight-line basis over the expected period of benefit, which can include anticipated contract renewals or extensions, consistent with the transfer to the client of the services to which the asset relates. Additionally, fixed assets associated with these contracts are capitalized and depreciated on a straight-line basis over the expected useful life of the asset. If an asset is contract specific, then the depreciation period is the shorter of the useful life of the asset or the contract term. Amounts paid to clients in excess of the fair value of acquired assets used in business process outsourcing arrangements are deferred and amortized on a straight-line basis as a reduction of revenue over the expected period of benefit. The company performs periodic reviews to assess the recoverability of deferred contract transition and setup costs. If the carrying amount is deemed not recoverable, an impairment loss is recognized. Refer to note C, “Revenue Recognition,” for the amount of deferred costs to fulfill a contract at December 31, 2023 and 2022. In situations in which a business process outsourcing or other cloud-based services contract is terminated, the terms of the contract may require the client to reimburse the company for the recovery of unbilled accounts receivable, unamortized deferred contract costs and additional costs incurred by the company to transition the services. Software Costs Costs that are related to the conceptual formulation and design of licensed software programs are expensed as incurred to research, development and engineering expense; costs that are incurred to produce the finished product after technological feasibility has been established are capitalized as an intangible asset. Capitalized amounts are amortized on a straight-line basis over periods ranging up to three years and are recorded in software cost within cost of sales. The company performs periodic reviews to ensure that unamortized program costs remain recoverable from future revenue. Costs to support or service licensed programs are charged to software cost within cost of sales as incurred. The company capitalizes certain costs that are incurred to purchase or develop internal-use software. Internal-use software programs also include software used by the company to deliver Software-as-a-Service when the client does not receive a license to the software and the company has no substantive plans to market the software externally. Capitalized costs are amortized on a straight-line basis over periods ranging up to three years and are recorded in selling, general and administrative expense or cost of sales, depending on whether the software is used by the company in revenue generating transactions. Additionally, the company may capitalize certain types of implementation costs and amortize them over the term of the arrangement when the company is a customer in a cloud-computing arrangement. Incremental Costs of Obtaining a Contract Incremental costs of obtaining a contract (e.g., sales commissions) are capitalized and amortized on a straight-line basis over the expected customer relationship period if the company expects to recover those costs. The expected customer relationship period, determined based on the average customer relationship period, including expected renewals, for each offering type, is three years. Expected renewal periods are only included in the expected customer relationship period if commission amounts paid upon renewal are not commensurate with amounts paid on the initial contract. Incremental costs of obtaining a contract include only those costs the company incurs to obtain a contract that it would not have incurred if the contract had not been obtained. The company has determined that certain commissions programs meet the requirements to be capitalized. Some commission programs are not subject to capitalization as the commission expense is paid and recognized as the related revenue is recognized. Additionally, as a practical expedient, the company expenses costs to obtain a contract as incurred if the amortization period would have been a year or less. These costs are included in selling, general and administrative expenses. Product Warranties The company offers warranties for its hardware products that generally range up to three years, with the majority being either one Revenue from extended warranty contracts is initially recorded as deferred income and subsequently recognized on a straight-line basis over the delivery period because the company is providing a service of standing ready to provide services over such term. Refer to note R, “Commitments & Contingencies,” for additional information. Shipping and Handling Costs related to shipping and handling are recognized as incurred and included in cost in the Consolidated Income Statement. Expense and Other Income Selling, General and Administrative Selling, general and administrative (SG&A) expense is charged to income as incurred, except for certain sales commissions, which are capitalized and amortized. For further information regarding capitalizing sales commissions, see “Incremental Costs of Obtaining a Contract” above. Expenses of promoting and selling products and services are classified as selling expense and, in addition to sales commissions, include such items as compensation, advertising and travel. General and administrative expense includes such items as compensation, legal costs, office supplies, non-income taxes, insurance and office rental. In addition, general and administrative expense includes other operating items such as an allowance for credit losses, workforce rebalancing charges for contractually obligated payments to employees terminated in the ongoing course of business, acquisition costs related to business combinations, amortization of certain intangible assets and environmental remediation costs. Advertising and Promotional Expense The company expenses advertising and promotional costs as incurred. Cooperative advertising reimbursements from vendors are recorded net of advertising and promotional expense in the period in which the related advertising and promotional expense is incurred. Advertising and promotional expense, which includes media, agency and promotional expense, was $1,237 million, $1,330 million and $1,413 million in 2023, 2022 and 2021, respectively, and is recorded in SG&A expense in the Consolidated Income Statement. Research, Development and Engineering Research, development and engineering (RD&E) costs are expensed as incurred. Software costs that are incurred to produce the finished product after technological feasibility has been established are capitalized as an intangible asset. Intellectual Property and Custom Development Income The company licenses and sells the rights to certain of its intellectual property (IP) including internally developed patents, trade secrets and technological know-how. Certain IP transactions to third parties are licensing/royalty-based and others are transaction-based sales/other transfers. Income from licensing arrangements is recognized at the inception of the license term i |
Accounting Changes
Accounting Changes | 12 Months Ended |
Dec. 31, 2023 | |
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 note H, “Taxes,” 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 Matter s –As the guidance is a change to disclosures only, it will impact note D, “Segments,” 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 A, "Significant Accounting Policies," for additional information. Troubled Debt Restructurings and Vintage Disclosures Standard/Description– Issuance date: March 2022. This eliminates the accounting guidance for troubled debt restructurings and requires an entity to apply the general loan modification guidance to all loan modifications, including those made to customers experiencing financial difficulty, to determine whether the modification results in a new loan or a continuation of an existing loan. The guidance also requires presenting current-period gross write-offs by year of origination for financing receivables and net investment in leases. Effective Date and Adoption Considerations – The amendment was effective January 1, 2023 and early adoption was permitted. The company adopted the guidance as of the effective date. Effect on Financial Statements or Other Significant Matter s– |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2023 | |
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 ($ in millions) For the year ended December 31: 2023 2022 2021 Hybrid Platform & Solutions $ 18,693 $ 17,866 $ 17,036 Transaction Processing 7,615 7,171 6,390 Total Software $ 26,308 $ 25,037 $ 23,426 Business Transformation $ 9,179 $ 8,834 $ 8,284 Application Operations 6,958 6,508 6,095 Technology Consulting 3,849 3,765 3,466 Total Consulting $ 19,985 $ 19,107 $ 17,844 Hybrid Infrastructure $ 9,215 $ 9,451 $ 8,167 Infrastructure Support 5,377 5,837 6,021 Total Infrastructure $ 14,593 $ 15,288 $ 14,188 Financing (1) $ 741 $ 645 $ 774 Other $ 233 $ 453 $ 1,119 Total Revenue $ 61,860 $ 60,530 $ 57,350 (1) Contains lease and loan financing arrangements which are not subject to the guidance on revenue from contracts with customers. Revenue by Geography ($ in millions) For the year ended December 31: 2023 2022 2021 Americas $ 31,666 $ 31,057 $ 28,299 Europe/Middle East/Africa 18,492 17,950 17,447 Asia Pacific 11,702 11,522 11,604 Total $ 61,860 $ 60,530 $ 57,350 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 December 31, 2023, the aggregate amount of the transaction price allocated to RPO related to customer contracts that are unsatisfied or partially unsatisfied was approximately $60 billion, of which approximately 70 percent 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 year ended December 31, 2023, revenue was reduced by $16 million for performance obligations satisfied or partially satisfied in previous periods mainly due to changes in estimates on contracts with cost-to-cost measures of progress. Refer to note A, “Significant Accounting Policies,” for additional information on these contracts and estimates of costs to complete. Reconciliation of Contract Balances The following table provides information about notes and accounts receivable—trade, contract assets and deferred income balances. ($ in millions) At December 31: 2023 2022 Notes and accounts receivable — trade (net of allowances of $192 in 2023 and $233 in 2022) $ 7,214 $ 6,541 Contract assets (1) 505 464 Deferred income (current) 13,451 12,032 Deferred income (noncurrent) 3,533 3,499 (1) Included within prepaid expenses and other current assets in the Consolidated Balance Sheet. The amount of revenue recognized during the year ended December 31, 2023 that was included within the deferred income balance at December 31, 2022 was $10.5 billion and primarily related to services and software. The following table provides roll forwards of the notes and accounts receivable—trade allowance for expected credit losses for the years ended December 31, 2023 and 2022. ($ in millions) January 1, 2023 Additions/(Releases) Write-offs Foreign currency and Other December 31, 2023 $233 $32 $(79) $6 $192 January 1, 2022 Additions/(Releases) Write-offs Foreign currency and Other December 31, 2022 $218 $59 $(31) $(14) $233 The contract assets allowance for expected credit losses was not material in the years ended December 31, 2023 and 2022. Deferred Costs ($ in millions) At December 31: 2023 2022 Capitalized costs to obtain a contract $ 686 $ 563 Deferred costs to fulfill a contract Deferred setup costs 399 456 Other deferred fulfillment costs 755 814 Total deferred costs (1) $ 1,841 $ 1,833 (1) Of the total deferred costs, $998 million was current and $842 million was noncurrent at December 31, 2023 and $967 million was current and $866 million was noncurrent at December 31, 2022. The amount of total deferred costs amortized during the year ended December 31, 2023 was $1,493 million and there were no material impairment losses incurred. Refer to note A, “Significant Accounting Policies,” for additional information on deferred costs to fulfill a contract and capitalized costs of obtaining a contract. |
Segments
Segments | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Segments | SEGMENTS The segments represent components of the company for which separate financial information is available that is utilized on a regular basis by the chief operating decision maker (the chief executive officer) in determining how to allocate resources and evaluate performance. The segments are determined based on several factors, including client base, homogeneity of products, technology, delivery channels and similar economic characteristics. Certain transactions between the segments are recorded to other (income) and expense and are reflected in segment pre-tax income. The company utilizes globally integrated support organizations to realize economies of scale and efficient use of resources. As a result, a considerable amount of expense is shared by all of the segments. This shared expense includes sales coverage, certain marketing functions and support functions such as Accounting, Treasury, Procurement, Legal, Human Resources, Chief Information Office, and Billing and Collections. Where practical, shared expenses are allocated based on measurable drivers of expense, e.g., headcount. When a clear and measurable driver cannot be identified, shared expenses are allocated on a financial basis that is consistent with the company’s management system, e.g., advertising expense is allocated based on the gross profits of the segments. A portion of the shared expenses, which are recorded in net income, are not allocated to the segments. These expenses are associated with the elimination of internal transactions and other miscellaneous items. In the first quarter of 2024, the company announced 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 will not impact the company’s Consolidated Financial Statements, but will impact its reportable segments beginning in the first quarter of 2024. The changes include: Security services, previously reported in the Software segment moved to the Consulting segment; The Weather Company assets divested in January 2024 previously reported in the Software segment moved to the Other—divested businesses category; and stock-based compensation expense and non-Financing net interest expense are no longer included in the company's reportable segment results, consistent with the company's management system. Since these changes did not occur until first-quarter 2024, the periods presented in this Annual Report are reported under the historical segments. 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. Performance measurement is based on pre-tax income from continuing operations. 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. Management System Segment View ($ in millions) For the year ended December 31: Software Consulting Infrastructure Financing Total 2023 Revenue $ 26,308 $ 19,985 $ 14,593 $ 741 $ 61,627 Pre-tax income from continuing operations 6,571 1,918 2,421 374 11,283 Revenue year-to-year change 5.1 % 4.6 % (4.5) % 14.8 % 2.6 % Pre-tax income year-to-year change 6.6 % 14.4 % 7.0 % 10.1 % 8.1 % Pre-tax income margin 25.0 % 9.6 % 16.6 % 50.5 % 18.3 % 2022 Revenue $ 25,037 $ 19,107 $ 15,288 $ 645 $ 60,077 Pre-tax income from continuing operations 6,162 1,677 2,262 340 10,441 Revenue year-to-year change 6.9 % 7.1 % 7.8 % (16.6) % 6.8 % Pre-tax income year-to-year change 27.1 % 15.7 % 11.7 % (22.9) % 19.1 % Pre-tax income margin 24.6 % 8.8 % 14.8 % 52.6 % 17.4 % 2021 Revenue $ 23,426 $ 17,844 $ 14,188 $ 774 $ 56,231 Pre-tax income from continuing operations 4,849 1,449 2,025 441 8,765 Reconciliations of IBM as Reported ($ in millions) For the year ended December 31: 2023 2022 2021 Revenue Total reportable segments $ 61,627 $ 60,077 $ 56,231 Other—divested businesses (2) 318 785 Other revenue 235 135 335 Total revenue $ 61,860 $ 60,530 $ 57,350 ($ in millions) For the year ended December 31: 2023 2022 2021 Pre-tax income from continuing operations Total reportable segments $ 11,283 $ 10,441 $ 8,765 Amortization of acquired intangible assets (1,627) (1,747) (1,838) Acquisition-related charges (33) (18) (43) Non-operating retirement-related (costs)/income (1) 39 (6,548) (1,282) Kyndryl-related impacts (2) — (351) 118 Workforce rebalancing charges (3) (435) — — Other—divested businesses 5 91 (102) Unallocated corporate amounts and other (541) (712) (782) Total pre-tax income from continuing operations $ 8,690 $ 1,156 $ 4,837 (1) 2022 includes a one-time, non-cash, pre-tax pension settlement charge of $5.9 billion. See note V, “Retirement-Related Benefits,” for additional information. (2) Net impacts for Kyndryl retained shares and related swaps. Refer to note E, “Acquisitions & Divestitures," and note T, "Derivative Financial Instruments," for additional information. (3) Beginning in the first quarter of 2023, the company updated its measure of segment pre-tax income, consistent with its management system, to no longer allocate workforce rebalancing charges to its reportable segments. Workforce rebalancing charges of $40 million and $182 million for 2022 and 2021, respectively, were included in the segments. Immaterial Items Equity Method Investments and Equity Method Investments Gains/(Losses) The equity method investments and the resulting gains and (losses) from these investments that are attributable to the segments did not have a material effect on the financial position or the financial results of the segments. Segment Assets and Other Items Software assets are mainly goodwill, acquired intangible assets and accounts receivable. Consulting assets are primarily goodwill and accounts receivable. Infrastructure assets are primarily goodwill, plant, property and equipment, accounts receivable and manufacturing inventory. Financing assets are primarily financing receivables, and cash and marketable securities. To ensure the efficient use of the company’s space and equipment, several segments may share leased or owned plant, property and equipment assets. Where assets are shared, landlord ownership of the assets is assigned to one segment and is not allocated to each user segment. This is consistent with the company’s management system and is reflected accordingly in the table below. In those cases, there will not be a precise correlation between segment pre-tax income and segment assets. Depreciation expense and capital expenditures that are reported by each segment also are consistent with the landlord ownership basis of asset assignment. Financing interest income of $680 million, $582 million and $628 million for the years ended December 31, 2023, 2022 and 2021, respectively, reflect the income associated with Financing's external client transactions, as well as the income from investment in cash and marketable securities. Financing interest expense of $298 million, $175 million and $129 million for the years ended December 31, 2023, 2022 and 2021, respectively, reflect the expense associated with intercompany loans and secured borrowings supporting Financing's external client transactions. These secured borrowings are included in note P, “Borrowings.” Intercompany financing activities are recorded to other (income) and expense and are reflected in segment pre-tax income. Management System Segment View ($ in millions) For the year ended December 31: Software Consulting Infrastructure Financing Total 2023 Assets $ 61,141 $ 14,342 $ 11,991 $ 14,409 $ 101,883 Depreciation/amortization of intangibles 526 106 1,018 8 1,659 Capital expenditures/investments in intangibles 385 20 836 15 1,255 2022 Assets $ 57,186 $ 13,481 $ 12,243 $ 15,757 $ 98,667 Depreciation/amortization of intangibles (1) 564 108 1,250 14 1,936 Capital expenditures/investments in intangibles 446 33 853 27 1,359 2021 Assets $ 58,420 $ 11,914 $ 11,766 $ 16,880 $ 98,980 Depreciation/amortization of intangibles (1) 598 97 1,257 49 2,001 Capital expenditures/investments in intangibles 559 55 792 33 1,439 (1) Recast to conform to 2023 presentation to remove amortization of acquired intangible assets. Reconciliations of IBM as Reported ($ in millions) At December 31: 2023 2022 Assets Total reportable segments $ 101,883 $ 98,667 Elimination of internal transactions (1,028) (1,062) Other—divested businesses 19 100 Unallocated amounts Cash and marketable securities 12,907 8,138 Deferred tax assets 6,468 6,078 Plant, other property and equipment 1,838 1,760 Operating right-of-use assets 2,085 1,586 Pension assets 7,506 8,236 Other (1) 3,563 3,740 Total IBM consolidated assets $ 135,241 $ 127,243 (1) Prior period has been reclassified to conform to the change in 2023 presentation. Major Clients No single client represented 10 percent or more of the company’s total revenue in 2023, 2022 or 2021. Geographic Information The following tables provide information for those countries that are 10 percent or more of the specific category. Revenue (1) ($ in millions) For the year ended December 31: 2023 2022 2021 United States $ 25,309 $ 25,098 $ 22,893 Other countries (2) 36,551 35,432 34,457 Total revenue $ 61,860 $ 60,530 $ 57,350 (1) Revenues are attributed to countries based on the location of the client. (2) Prior periods reclassified to conform to the changes in 2023 presentation. Plant and Other Property–Net (1) ($ in millions) At December 31: 2023 2022 2021 United States $ 3,466 $ 3,209 $ 3,375 Other countries 2,027 2,100 2,293 Total $ 5,492 $ 5,308 $ 5,668 (1) Excludes rental machines. Operating Right-of-Use Assets–Net ($ in millions) At December 31: 2023 2022 2021 United States $ 1,249 $ 1,074 $ 1,148 Japan 340 259 398 Other countries 1,631 1,545 1,676 Total $ 3,220 $ 2,878 $ 3,222 Revenue by Classes of Similar Products or Services The following table presents external revenue for similar classes of products or services within the company’s reportable segments. Client solutions often include IBM software and systems and other suppliers’ products if the client solution requires it. For each of the segments that include services, Software-as-a-Service, consulting, education, training and other product-related services are included as services. For each of these segments, software includes product license charges and ongoing subscriptions. ($ in millions) For the year ended December 31: 2023 2022 2021 Software Software $ 22,483 $ 21,374 $ 19,845 Services 3,764 3,575 3,485 Systems 62 88 96 Consulting Services $ 19,691 $ 18,857 $ 17,563 Software 212 170 173 Systems 82 80 108 Infrastructure Maintenance $ 4,138 $ 4,590 $ 4,743 Servers 4,253 4,471 3,483 Services 2,463 2,653 2,616 Storage 2,081 1,989 1,919 Software 1,658 1,585 1,426 Financing Financing $ 680 $ 582 $ 628 Used equipment sales $ 60 $ 64 $ 145 |
Acquisitions & Divestitures
Acquisitions & Divestitures | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions & Divestitures | ACQUISITIONS & DIVESTITURES Acquisitions Purchase price consideration for all acquisitions was paid primarily in cash. All acquisitions, except 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. 2023 In 2023, the company completed nine acquisitions at an aggregate cost of $5,197 million. Each acquisition is expected to enhance the company’s portfolio of products and services capabilities and further advance IBM’s hybrid cloud and AI strategy. Acquisition Segment Description of Acquired Business First Quarter StepZen, Inc. Software Developer of GraphQL to help build application programming interfaces (APIs) Asset Strategy Library (ASL) Portfolio of Uptake Technologies Software Library of industrial asset management data NS1 Software Leading provider of network automation SaaS solutions Second Quarter Ahana Cloud, Inc. Software Expert in open-source-based solutions for data analytics Polar Security Software Innovator in technology that helps companies discover, continuously monitor and secure cloud and SaaS application data Agyla SAS Consulting Leading provider of cloud platform engineering services in France specializing in Cloud, DevOps and Security Third Quarter Apptio, Inc. Software Leading provider of financial and operational IT management and optimization software which enables enterprise leaders to deliver enhanced business value across technology investments Fourth Quarter Manta Software, Inc. Software World-class data lineage platform to complement capabilities within watsonx.ai, watsonx.data and watsonx.governance Equine Global Consulting ERP specialist and cloud consulting services provider At December 31, 2023, the remaining cash to be remitted by the company related to 2023 acquisitions was not material. The following table reflects the purchase price related to these acquisitions and the resulting purchase price allocations as of December 31, 2023. ($ in millions) Amortization Apptio, Inc. Other Current assets $ 146 $ 80 Property, plant and equipment/noncurrent assets 4 12 Intangible assets Goodwill N/A 3,541 401 Client relationships 6—10 770 44 Completed technology 5—7 530 108 Trademarks 1—5 35 2 Total assets acquired $ 5,027 $ 647 Current liabilities 249 41 Noncurrent liabilities 166 20 Total liabilities assumed $ 415 $ 62 Total purchase price $ 4,612 $ 585 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; however, material changes are not expected. The goodwill generated is primarily attributable to the assembled workforce of the acquired businesses and the increased synergies expected to be achieved from the integration of the acquired businesses into the company’s various integrated solutions and services neither of which qualifies as an amortizable intangible asset. Apptio, Inc. –Goodwill of $3,170 million and $371 million was assigned to the Software and Consulting segments, respectively. It is expected that one percent of the goodwill will be deductible for tax purposes. The overall weighted-average useful life of the identified amortizable intangible assets acquired was 8.7 years. Other Acquisitions –Goodwill of $358 million, $31 million and $12 million was assigned to the Software, Consulting and Infrastructure segments, respectively. It is expected that none of the goodwill will be deductible for tax purposes. The overall weighted-average useful life of the identified amortizable intangible assets acquired was 6.6 years. The identified intangible assets will be amortized on a straight-line basis over their useful lives, which approximates the pattern that the assets’ economic benefits are expected to be consumed over time. Transactions Announced –Each of the announced acquisitions is subject to customary closing conditions, including regulatory clearance. On December 18, 2023, the company entered into a definitive agreement with Software AG to acquire 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 T, “Derivative Financial Instruments,” for additional information. In January 2024, the company entered into a definitive agreement to acquire application modernization capabilities from Advanced, which brings a combination of talent, tools and knowledge to enhance the company's Consulting mainframe application and data modernization services. The acquisition is expected to close in the second quarter of 2024 and will be integrated into the Consulting segment upon closing. 2022 In 2022, the company completed eight acquisitions at an aggregate cost of $2,651 million. Each acquisition is expected to enhance the company’s portfolio of products and services capabilities and further advance IBM’s hybrid cloud and AI strategy. Acquisition Segment Description of Acquired Business First Quarter Envizi Software Data and analytics software provider for environmental performance management Sentaca Consulting Telco consulting services and solutions provider specializing in automation, cloud migration, and future networks for telecommunications providers Neudesic Consulting Application development and cloud computing services company Second Quarter Randori Software Leading attack surface management (ASM) and cybersecurity provider Databand.ai Software Proactive data observability platform that isolates data errors and issues to alert relevant stakeholders Third Quarter Omnio Software Developer of software connectors used in the collection of raw data for various Industrial Internet of Things (IoT) applications Fourth Quarter Dialexa Consulting Digital product engineering services firm Octo Consulting IT modernization and digital transformation services provider exclusively serving the U.S. federal government At December 31, 2022, the remaining cash to be remitted by the company related to certain 2022 acquisitions was $238 million, of which $103 million was paid in 2023 and the remaining amount is expected to be paid in 2024. The following table reflects the purchase price related to these acquisitions and the resulting purchase price allocations as of December 31, 2023. Net purchase price adjustments recorded in 2023 were not material. ($ in millions) Amortization Octo Other Acquisitions Current assets $ 119 $ 87 Property, plant and equipment/noncurrent assets 8 8 Intangible assets Goodwill N/A 829 1,055 Client relationships 7—10 365 204 Completed technology 4—7 30 90 Trademarks 2—3 15 10 Total assets acquired $ 1,366 $ 1,454 Current liabilities 53 52 Noncurrent liabilities 50 15 Total liabilities assumed $ 103 $ 67 Total purchase price $ 1,264 $ 1,387 N/A–Not applicable The goodwill generated is primarily attributable to the assembled workforce of the acquired businesses and the increased synergies expected to be achieved from the integration of the acquired businesses into the company’s various integrated solutions and services neither of which qualifies as an amortizable intangible asset. Octo –The overall weighted-average useful life of the identified amortizable intangible assets acquired was 9.3 years. Goodwill of $709 million and $120 million was assigned to the Consulting and Software segments, respectively. It is expected that 24 percent of the goodwill will be deductible for tax purposes. Other acquisitions –The overall weighted-average useful life of the identified amortizable intangible assets acquired was 6.7 years. Goodwill of $625 million and $431 million was assigned to the Consulting and Software segments, respectively. It is expected that 52 percent of the goodwill will be deductible for tax purposes. The identified intangible assets will be amortized on a straight-line basis over their useful lives, which approximates the pattern that the assets’ economic benefits are expected to be consumed over time. 2021 In 2021, the company completed fifteen acquisitions at an aggregate cost of $3,341 million. Acquisition Segment Description of Acquired Business First Quarter Nordcloud Consulting Consulting company providing services in cloud implementation, application transformation and managed services Taos Mountain, LLC (Taos) Consulting Leading cloud professional and managed services provider StackRox Software Innovator in container and Kubernetes-native security Second Quarter Turbonomic, Inc. (Turbonomic) Software Application Resource Management and Network Performance Management software provider ECX Copy Data Management business from Catalogic Software, Inc. Software Smart data protection solution Waeg Consulting Leading Salesforce consulting partner myInvenio Software Process mining software company Third Quarter VEVRE Software business from Volta, Inc. Software Cloud-native virtual routing engine BoxBoat Technologies Consulting Premier DevOps consultancy and enterprise Kubernetes certified service provider Bluetab Solutions Group Consulting Data solutions service provider Fourth Quarter SXiQ Digital Pty Ltd Consulting Digital transformation services company specializing in cloud applications, cloud platforms and cloud cybersecurity McD Tech Labs from McDonald’s Software Asset purchase to accelerate the development and deployment of McDonald’s Automated Order Taking (AOT) technology ReaQta Software Provider of endpoint security solutions designed to leverage AI to automatically identify and manage threats Adobe Workfront practice from Rego Consulting Corporation Consulting Work management software consulting for enterprise clients Phlyt Software Cloud-native development consultancy The following table reflects the purchase price related to these acquisitions and the resulting purchase price allocations as of December 31, 2022. Net purchase price adjustments recorded in 2022 primarily related to deferred tax assets and liabilities. ($ in millions) Amortization Turbonomic Other Current assets $ 115 $ 112 Property, plant and equipment/noncurrent assets 11 18 Intangible assets Goodwill N/A 1,390 1,073 Client relationships 4—10 309 196 Completed technology 4—7 117 206 Trademarks 1—6 15 31 Total assets acquired $ 1,957 $ 1,636 Current liabilities 73 68 Noncurrent liabilities 55 56 Total liabilities assumed $ 128 $ 124 Total purchase price $ 1,829 $ 1,512 N/A–Not applicable The goodwill generated is primarily attributable to the assembled workforce of the acquired businesses and the increased synergies expected to be achieved from the integration of the acquired businesses into the company’s various integrated solutions and services neither of which qualifies as an amortizable intangible asset. Turbonomic –The overall weighted-average useful life of the identified amortizable intangible assets acquired was 9.0 years. Goodwill of $1,325 million and $65 million was assigned to the Software and Consulting segments, respectively. It is expected that none of the goodwill will be deductible for tax purposes. Other acquisitions –The overall weighted-average useful life of the identified amortizable intangible assets acquired was 6.6 years. Goodwill of $633 million and $440 million was assigned to the Consulting and Software segments, respectively. It is expected that nine percent of the goodwill will be deductible for tax purposes. The identified intangible assets will be amortized on a straight-line basis over their useful lives, which approximates the pattern that the assets’ economic benefits are expected to be consumed over time. Divestitures Transactions Closed in 2024 –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 At December 31, 2023, the business continued to meet the criteria for held-for-sale classification. Held-for-sale assets of approximately $545 million, which consist primarily of goodwill, prepaid and other current assets, intangible assets-net and plant, property and equipment-net of approximately $464 million, $50 million, $21 million and $10 million, respectively, and held-for-sale liabilities of $19 million consisting primarily of deferred income, were included in the company’s Consolidated Balance Sheet at December 31, 2023. The transaction closed on January 31, 2024. Upon closing, the company received cash proceeds of $750 million and provided seller financing to Francisco in the form of a $100 million loan with a term of 7 years. The company recognized a pre-tax gain on sale of approximately $240 million at closing. As discussed in note D, "Segments," in the first quarter of 2024, The Weather Company assets previously reported in the Software segment moved to the Other—divested businesses category. 2023 The company completed two divestitures in the second quarter of 2023. The financial terms related to each of these transactions did not have a material impact to IBM's Consolidated Financial Statements. 2022 Healthcare Software Assets –In January 2022, IBM and Francisco Partners (Francisco) signed a definitive agreement in which Francisco would acquire IBM’s healthcare data and analytics assets reported within Other—divested businesses for $1,065 million. The assets included Health Insights, MarketScan, Clinical Development, Social Program Management, Micromedex, and imaging software offerings. In addition, IBM is providing Francisco with transition services including IT and other services. The closing completed for the U.S. and Canada on June 30, 2022 and the company received a cash payment of $1,065 million. Subsequent closings were completed in most other countries in the second half of 2022, with the remaining country closings completed in 2023. The total pre-tax gain recognized on this transaction as of December 31, 2023 was $303 million and was recorded in other (income) and expense Other Divestitures –In the first quarter of 2022, the Infrastructure segment completed one divestiture. The financial terms related to this transaction did not have a material impact to IBM's Consolidated Financial Statements. 2021 Separation of Kyndryl –On November 3, 2021, the company completed the separation of its managed infrastructure services unit into a new public company, Kyndryl. The company retained 19.9 percent of the shares of Kyndryl common stock immediately following the separation. During 2022, the company fully disposed of its retained interest in Kyndryl common stock pursuant to exchange agreements with a third-party financial institution, which were completed within twelve months of separation. The historical results of Kyndryl have been presented as discontinued operations and, as such, have been excluded from continuing operations and segment results for all periods presented. IBM provided transition services to Kyndryl predominantly consisting of information technology services for a period of two years after the separation. All transition services concluded in the fourth quarter of 2023. The impact of these transition services on the company’s Consolidated Financial Statements for the years ended December 31, 2023, 2022 and 2021 was not material. At separation, IBM and Kyndryl entered into various commercial agreements pursuant to which Kyndryl will purchase hardware, software and services from IBM and under which IBM will receive hosting and information infrastructure services from Kyndryl. As part of the separation, IBM also committed to provide upgraded hardware at no cost to Kyndryl over a two The following table presents the major categories of income/(loss) from discontinued operations, net of tax. ($ in millions) For the year ended December 31: 2023 2022 2021 (1) Revenue $ — $ 7 $ 14,994 Cost of sales — 24 11,270 Selling, general and administrative expense (2) 22 86 1,900 RD&E and Other (income) and expense (1) (84) 80 Income/(loss) from discontinued operations before income taxes $ (20) $ (20) $ 1,744 Provision for/(benefit from) income taxes (3) (9) 124 714 Income/(loss) from discontinued operations, net of tax $ (12) $ (143) $ 1,030 (1) Excludes intercompany transactions between IBM and Kyndryl and general corporate overhead costs transferred to Kyndryl. (2) Prior periods recast to conform to 2023 presentation. (3) 2021 includes tax charges related to the Kyndryl separation. Loss from discontinued operations before income taxes for the year ended December 31, 2023 reflects the net impact of changes in separation-related estimates and the settlement of assets and liabilities in accordance with the separation and distribution agreement. Loss from discontinued operations, net of tax, for the year ended December 31, 2022 reflects the same drivers above and also reflects a gain on sale of a joint venture historically managed by Kyndryl, which was sold to Kyndryl in the first quarter of 2022 upon receiving regulatory approval. Separation costs of $5 million and $1,042 million were incurred during the years ended December 31, 2022 and 2021, respectively, and are included in income/(loss) from discontinued operations, net of tax, in the Consolidated Income Statement. There were no separation charges incurred for the year ended December 31, 2023. The following table presents selected financial information related to cash flows from discontinued operations. ($ in millions) For the year ended December 31: 2023 2022 2021 Net cash provided by/(used in) operating activities $ — $ — $ 1,612 Net cash provided by/(used in) investing activities — 48 (380) Other Divestitures |
Other (Income) and Expense
Other (Income) and Expense | 12 Months Ended |
Dec. 31, 2023 | |
Other Income and Expenses [Abstract] | |
Other (Income) and Expense | OTHER (INCOME) AND EXPENSE Components of other (income) and expense are as follows: ($ in millions) For the year ended December 31: 2023 2022 2021 Other (income) and expense Foreign currency transaction losses/(gains) (1) $ 116 $ (643) $ (204) (Gains)/losses on derivative instruments (1) (17) 225 205 Interest income (670) (162) (52) Net (gains)/losses from securities and investment assets (39) 278 (133) Retirement-related costs/(income) (2) (39) 6,548 1,282 Other (3) (266) (443) (225) Total other (income) and expense $ (914) $ 5,803 $ 873 (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 T, "Derivative Financial Instruments," for additional information on foreign exchange risk. (2) 2022 includes a one-time, non-cash pension settlement charge of $5.9 billion. Refer to note V, "Retirement-Related Benefits," for additional information. (3) |
Research, Development & Enginee
Research, Development & Engineering | 12 Months Ended |
Dec. 31, 2023 | |
Research and Development [Abstract] | |
Research, Development & Engineering | RESEARCH, DEVELOPMENT & ENGINEERING RD&E expense was $6,775 million in 2023, $6,567 million in 2022 and $6,488 million in 2021. The company incurred total expense of $6,342 million, $6,267 million and $6,216 million in 2023, 2022 and 2021, respectively, for scientific research and the application of scientific advances to the development of new and improved products and their uses, as well as services and their application. Within these amounts, software-related expense was $3,866 million, $3,971 million and $3,922 million in 2023, 2022 and 2021, respectively. Expense for product-related engineering was $432 million, $299 million and $272 million in 2023, 2022 and 2021, respectively. |
Taxes
Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Taxes | TAXES ($ in millions) For the year ended December 31: 2023 2022 2021 Income/(loss) from continuing operations before income taxes U.S. operations (1) $ (227) $ (6,602) $ (2,654) Non-U.S. operations 8,917 7,758 7,491 Total income from continuing operations before income taxes $ 8,690 $ 1,156 $ 4,837 (1) 2022 includes the impact of a one-time, non-cash pension settlement charge. Refer to note V, “Retirement-Related Benefits,” for additional information. The income from continuing operations provision for/(benefit from) income taxes by geographic operations was as follows: ($ in millions) For the year ended December 31: 2023 2022 2021 U.S. operations $ (574) $ (2,272) $ (969) Non-U.S. operations 1,750 1,645 1,093 Total continuing operations provision for/(benefit from) income taxes $ 1,176 $ (626) $ 124 The components of the income from continuing operations provision for/(benefit from) income taxes by taxing jurisdiction were as follows: ($ in millions) For the year ended December 31: 2023 2022 2021 U.S. federal Current $ 560 $ 391 $ 374 Deferred (1,371) (2,645) (1,358) $ (811) $ (2,253) $ (984) U.S. state and local Current $ 127 $ 184 $ 161 Deferred (162) (486) (370) $ (34) $ (302) $ (209) Non-U.S. Current $ 1,594 $ 1,676 $ 1,342 Deferred 428 252 (25) $ 2,022 $ 1,929 $ 1,317 Total continuing operations provision for/(benefit from) income taxes $ 1,176 $ (626) $ 124 Discontinued operations provision for/(benefit from) income taxes $ (9) $ 124 $ 714 Total provision for/(benefit from) income taxes $ 1,167 $ (503) $ 838 In addition to the total provision for/(benefit from) income taxes, the company recorded a provision included in net income for social security, real estate, personal property and other taxes of approximately $2.9 billion in 2023. The total taxes included in net income was approximately $4.0 billion in 2023. A reconciliation of the statutory U.S. federal tax rate to the company’s effective tax rate from continuing operations was as follows: For the year ended December 31: 2023 2022 2021 Statutory rate 21 % 21 % 21 % Tax differential on foreign income (1) (3) (29) (10) Domestic incentives (1) (5) (24) (5) State and local (1) 0 (21) (3) Other (1) 1 (1) 0 Effective rate 14 % (54) % 3 % (1) 2022 includes the impacts of the pension settlement charge on tax differential on foreign income, domestic incentives, state and local, and other of (24) points, (20) points, (21) points, and (1) point, respectively. Percentages rounded for disclosure purposes. The significant components reflected within the tax rate reconciliation labeled “Tax differential on foreign income” include the effects of foreign subsidiaries’ earnings taxed at rates other than the U.S. statutory rate, U.S. taxes on foreign income and any net impacts of intercompany transactions. These items also reflect audit settlements or changes in the amount of unrecognized tax benefits associated with each of these items. The continuing operations effective tax rate for 2023 was 13.5 percent compared to (54.2) percent in 2022. The prior-year effective tax rate was primarily driven by the transfer of a portion of the Qualified PPP’s defined benefit pension obligations and related plan assets. Refer to note V, '"Retirement-Related Benefits," for additional information. The 2021 effective tax rate was primarily driven by tax benefits related to audit settlements in multiple jurisdictions. The effect of tax law changes on deferred tax assets and liabilities did not have a material impact on the company’s 2023 effective tax rate. Deferred Tax Assets ($ in millions) At December 31: 2023 2022 Retirement benefits $ 2,269 $ 1,954 Leases 1,055 927 Share-based and other compensation 720 608 Domestic tax loss/credit carryforwards 2,194 1,798 Deferred income 682 633 Foreign tax loss/credit carryforwards 651 845 Bad debt, inventory and warranty reserves 305 383 Depreciation 205 247 Restructuring charges 94 101 Accruals 253 215 Intangible assets 2,774 2,879 Capitalized research and development 3,524 3,012 Other 1,141 1,157 Gross deferred tax assets 15,868 14,759 Less: valuation allowance 765 770 Net deferred tax assets $ 15,103 $ 13,989 Deferred Tax Liabilities ($ in millions) At December 31: 2023 2022 Goodwill and intangible assets $ 3,054 $ 3,156 GILTI deferred taxes 2,195 2,483 Leases and right-of-use assets 1,369 1,174 Depreciation 523 505 Retirement benefits 1,443 1,609 Deferred transition costs 47 56 Undistributed foreign earnings 192 87 Other 770 955 Gross deferred tax liabilities $ 9,593 $ 10,025 For financial reporting purposes, the company had foreign and domestic loss carryforwards, the tax effect of which was $681 million, as well as foreign and domestic credit carryforwards of $2,164 million. Substantially all of these carryforwards are available for at least two years and the majority are available for 10 years or more. The valuation allowances as of December 31, 2023, 2022 and 2021 were $765 million, $770 million and $883 million, respectively. The amounts principally apply to certain foreign and domestic loss carryforwards and credits. In the opinion of management, it is more likely than not that these assets will not be realized. However, to the extent that tax benefits related to these carryforwards and credits are realized in the future, the reduction in the valuation allowance will reduce income tax expense. The amount of unrecognized tax benefits at December 31, 2023 increased by $44 million in 2023 to $8,772 million. A reconciliation of the beginning and ending amount of unrecognized tax benefits was as follows: ($ in millions) 2023 2022 2021 Balance at January 1 $ 8,728 $ 8,709 $ 8,568 Additions based on tax positions related to the current year 296 355 934 Additions for tax positions of prior years 231 174 247 Reductions for tax positions of prior years (including impacts due to a lapse of statute) (457) (470) (688) Settlements (26) (41) (352) Balance at December 31 $ 8,772 $ 8,728 $ 8,709 The additions to unrecognized tax benefits related to the current and prior years were primarily attributable to U.S. federal and state and non-U.S. tax matters, including transfer pricing. The settlements and reductions to unrecognized tax benefits for tax positions of prior years were primarily attributable to non-U.S. and U.S. federal and state tax matters, including impacts due to lapse of statute of limitations. The unrecognized tax benefits at December 31, 2023 of $8,772 million can be reduced by $567 million associated with timing adjustments, potential transfer pricing adjustments and state income taxes. The net amount of $8,205 million, if recognized, would favorably affect the company’s effective tax rate. The net amounts at December 31, 2022 and 2021 were $8,191 million and $8,163 million, respectively. Interest and penalties related to income tax liabilities are included in income tax expense. During the years ended December 31, 2023, 2022 and 2021, the company recognized $379 million, $185 million and $125 million, respectively, in interest expense and penalties. The company had $1,321 million and $956 million for the payment of interest and penalties accrued at December 31, 2023 and December 31, 2022, respectively. Within the next 12 months, the company believes it is reasonably possible that the total amount of unrecognized tax benefits associated with certain positions may be reduced. The potential decrease in the amount of unrecognized tax benefits is associated with certain non-U.S. positions that are expected to be recognized due to a lapse in statute of limitations, as well as anticipated resolution of various audits. The company estimates that the unrecognized tax benefits at December 31, 2023 could be reduced by $143 million. During the fourth quarter of 2020, the U.S. Internal Revenue Service (IRS) concluded its examination of the company’s U.S. income tax returns for 2013 and 2014 and issued a final Revenue Agent’s Report (RAR) proposing adjustments related to certain cross-border transactions that occurred in 2013. The company filed its IRS Appeals protest in the first quarter of 2021, and in October of 2023, the IRS issued a revised RAR. These adjustments, if sustained, would increase the company’s income subject to tax by approximately $4.2 billion, with tax calculated at the relevant federal income tax rate. The company continues to strongly disagree with the IRS position and will pursue resolution at IRS Appeals and then court, if necessary. In the first quarter of 2024, the IRS concluded its examination of the company's U.S. income tax returns for 2015 and 2016 and issued a final RAR proposing adjustments related to certain cross-border transactions that occurred in 2015. The proposed adjustments, if sustained, would increase the company’s income subject to tax by approximately $1.2 billion, with tax calculated at the relevant federal income tax rate. The company strongly disagrees with the IRS position and will pursue resolution at IRS Appeals and then court, if necessary. In the fourth quarter of 2021, the IRS commenced its audit of the company’s U.S. tax returns for 2017 and 2018. With respect to major U.S. state and foreign taxing jurisdictions, the company is generally no longer subject to tax examinations for years prior to 2016. The company is no longer subject to income tax examination of its U.S. federal tax return for years prior to 2013. The open years contain matters that could be subject to differing interpretations of applicable tax laws and regulations as it relates to the amount and/or timing of income, deductions, and tax credits. Although the outcome of tax audits is always uncertain, the company believes that adequate amounts of tax, interest and penalties have been provided for any adjustments that are expected to result for these years. The company is involved in a number of income tax-related matters in India challenging tax assessments issued by the India Tax Authorities. As of December 31, 2023, the company had recorded $557 million as prepaid income taxes in India. A significant portion of this balance represents cash tax deposits paid over time to protect the company’s right to appeal various income tax assessments made by the India Tax Authorities. Although the outcome of tax audits is always uncertain, the company believes that adequate amounts of tax, interest and penalties have been provided for any adjustments that are expected to result for these years. Within consolidated retained earnings at December 31, 2023 were undistributed after-tax earnings from certain non-U.S. subsidiaries that were not indefinitely reinvested. At December 31, 2023, the company had a deferred tax liability of $192 million for the estimated taxes associated with the repatriation of these earnings. Undistributed earnings of approximately $799 million and other outside basis differences in foreign subsidiaries were indefinitely reinvested in foreign operations. Quantification of the deferred tax liability, if any, associated with indefinitely reinvested earnings and outside basis differences was not practicable |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE The following table presents the computation of basic and diluted earnings per share of common stock. ($ in millions except per share amounts) For the year ended December 31: 2023 2022 (1) 2021 Weighted-average number of shares on which earnings per share calculations are based Basic 911,210,319 902,664,190 895,990,771 Add—incremental shares under stock-based compensation plans 8,700,951 7,593,455 6,883,290 Add—incremental shares associated with contingently issuable shares 2,162,558 2,011,417 1,766,940 Assuming dilution 922,073,828 912,269,062 904,641,001 Income from continuing operations $ 7,514 $ 1,783 $ 4,712 Income/(loss) from discontinued operations, net of tax (12) (143) 1,030 Net income on which basic earnings per share is calculated $ 7,502 $ 1,639 $ 5,743 Income from continuing operations $ 7,514 $ 1,783 $ 4,712 Net income applicable to contingently issuable shares — — — Income from continuing operations on which diluted earnings per share is calculated $ 7,514 $ 1,783 $ 4,712 Income/(loss) from discontinued operations, net of tax, on which diluted earnings per share is calculated (12) (143) 1,030 Net income on which diluted earnings per share is calculated $ 7,502 $ 1,639 $ 5,743 Earnings/(loss) per share of common stock Assuming dilution Continuing operations $ 8.15 $ 1.95 $ 5.21 Discontinued operations (0.01) (0.16) 1.14 Total $ 8.14 $ 1.80 $ 6.35 Basic Continuing operations $ 8.25 $ 1.97 $ 5.26 Discontinued operations (0.01) (0.16) 1.15 Total $ 8.23 $ 1.82 $ 6.41 (1) Includes the impact of a one-time, non-cash pension settlement charge. Refer to note V, “Retirement-Related Benefits,” for additional information . Weighted-average stock options to purchase 1,761,463 common shares in 2023, 814,976 common shares in 2022 and 980,505 common shares in 2021 were outstanding, but were not included in the computation of diluted earnings per share because the exercise price of the options was greater than the average market price of the common shares for the full year, and therefore, the effect would have been antidilutive. |
Financial Assets & Liabilities
Financial Assets & Liabilities | 12 Months Ended |
Dec. 31, 2023 | |
Investments, All Other Investments [Abstract] | |
Financial Assets & Liabilities | FINANCIAL ASSETS & LIABILITIES Fair Value Measurements Financial Assets and 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 December 31, 2023 and 2022. ($ in millions) Fair Value 2023 2022 At December 31: Hierarchy Level Assets (6) Liabilities (7) Assets (6) Liabilities (7) Cash equivalents (1) Time deposits and certificates of deposit (2) 2 $ 7,206 N/A $ 3,712 N/A Money market funds 1 494 N/A 306 N/A Total cash equivalents $ 7,699 N/A $ 4,018 N/A Equity investments 1 25 N/A — N/A Debt securities–current (2)(3) 2 373 N/A 852 N/A Debt securities–noncurrent (2)(4) 2,3 8 N/A 31 N/A Derivatives designated as hedging instruments Interest rate contracts 2 2 299 3 336 Foreign exchange contracts 2 131 275 184 674 Derivatives not designated as hedging instruments Foreign exchange contracts (5) 2 115 19 42 16 Equity contracts 2 93 — 49 8 Total $ 8,446 $ 593 $ 5,179 $ 1,034 (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) U.S. treasury bills and term deposits that are reported within marketable securities in the Consolidated Balance Sheet. (4) Includes immaterial activity related to private company investments reported within investments and sundry assets in the Consolidated Balance Sheet. (5) 2023 assets include $62 million related to foreign exchange call option contracts entered into in connection with the planned acquisition of StreamSets and webMethods from Software AG. Refer to note T, “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 December 31, 2023 were $304 million and $37 million, respectively, and at December 31, 2022 were $271 million and $7 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 December 31, 2023 were $294 million and $299 million, respectively, and at December 31, 2022 were $546 million and $488 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 December 31, 2023 and 2022, 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 $50,121 million and $46,189 million, and the estimated fair value was $48,284 million and $42,514 million at December 31, 2023 and 2022, respectively. If measured at fair value in the financial statements, long-term debt (including the current portion) would be classified as Level 2 in the fair value hierarchy. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Inventory | INVENTORY ($ in millions) At December 31: 2023 2022 Finished goods $ 78 $ 158 Work in process and raw materials $ 1,083 $ 1,394 Total $ 1,161 $ 1,552 |
Financing Receivables
Financing Receivables | 12 Months Ended |
Dec. 31, 2023 | |
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: ($ in millions) Client Financing Receivables Client Loan and Investment in Commercial Financing Receivables At December 31, 2023: Held for Held for 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 ($ in millions) Client Financing Receivables Client Loan and Investment in Commercial Financing Receivables At December 31, 2022: Held for Held for Sale (1) Total Financing receivables, gross $ 8,875 $ 4,023 $ 299 $ 939 $ 14,136 Unearned income (439) (351) — — (790) Unguaranteed residual value — 422 — — 422 Amortized cost $ 8,437 $ 4,094 $ 299 $ 939 $ 13,769 Allowance for credit losses (108) (60) (5) — (173) Total financing receivables, net $ 8,329 $ 4,034 $ 293 $ 939 $ 13,596 Current portion $ 5,073 $ 1,485 $ 293 $ 939 $ 7,790 Noncurrent portion $ 3,256 $ 2,549 $ — $ — $ 5,806 (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 $232 million and $349 million at December 31, 2023 and 2022, respectively. These borrowings are included in note P, “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 allowed for sales up to $3.0 billion. In December 2023, the company amended and renewed its agreement to sell up to $1.9 billion and reducing to $1.3 billion in January 2024, for one year. In addition, the company enters into agreements with third-party financial institutions to sell certain of its client financing receivables, including both loan and lease receivables, for cash proceeds. There were no material client financing receivables transferred for the years ended December 31, 2023 and 2022. The following table presents the total amount of commercial financing receivables transferred. ($ in millions) For the year ended December 31: 2023 2022 Commercial financing receivables Receivables transferred during the period $ 9,248 $ 9,029 Receivables uncollected at end of period (1) $ 1,600 $ 1,561 (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 December 31, 2023 and 2022. 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 twelve months ended December 31, 2023 and 2022, the net loss, including fees, associated with the transfer of commercial financing receivables was $98 million and $62 million, respectively, and is included in other (income) and expense in the Consolidated Income Statement. Financing Receivables by Portfolio Segment The following tables present the amortized cost basis for client financing receivables at December 31, 2023 and 2022, further segmented by three classes: Americas, Europe/Middle East/Africa (EMEA) and Asia Pacific. The commercial financing receivables portfolio segment is excluded from the tables in the sections below as the receivables are short term in nature and the current estimated risk of loss and resulting impact to the company’s financial results are not material. ($ 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 ($ in millions) At December 31, 2022: Americas EMEA Asia Pacific Total Amortized cost $ 7,281 $ 3,546 $ 1,704 $ 12,531 Allowance for credit losses Beginning balance at January 1, 2022 $ 111 $ 61 $ 23 $ 195 Write-offs (20) (3) (2) (25) Recoveries 1 0 4 5 Additions/(releases) (5) 6 (4) (3) Other (1) 2 (5) (2) (4) Ending balance at December 31, 2022 $ 88 $ 60 $ 20 $ 168 (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.” Past Due Financing Receivables The company summarizes information about the amortized cost basis for client financing receivables, including amortized cost aged over 90 days and still accruing, billed invoices aged over 90 days and still accruing, and amortized cost not accruing. ($ in millions) At December 31, 2023: Total Amortized Cost > 90 Days (1) Amortized Cost > 90 Days and Accruing (1) Billed Amortized Cost Not Accruing (2) Americas $ 6,488 $ 111 $ 40 $ 6 $ 71 EMEA 3,007 31 1 1 31 Asia Pacific 1,368 9 1 0 8 Total client financing receivables $ 10,863 $ 151 $ 43 $ 7 $ 110 ($ in millions) At December 31, 2022: Total Amortized Cost > 90 Days (1) Amortized Cost > 90 Days and Accruing (1) Billed Amortized Cost Not Accruing (2) Americas $ 7,281 $ 272 $ 198 $ 22 $ 74 EMEA 3,546 52 8 1 46 Asia Pacific 1,704 20 3 1 17 Total client financing receivables $ 12,531 $ 344 $ 208 $ 23 $ 137 (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 $106 million and $122 million at December 31, 2023 and 2022, respectively. Financing income recognized on these receivables was immaterial for the years ended December 31, 2023 and 2022. Credit Quality Indicators The company’s credit quality indicators, which are based on rating agency data, publicly available information and information provided by customers, are reviewed periodically based on the relative level of risk. The resulting indicators are a numerical rating system that maps to Moody’s Investors Service credit ratings as shown below. The company uses information provided by Moody’s, where available, as one of many inputs in its determination of customer credit ratings. The credit quality of the customer is evaluated based on these indicators and is assigned the same risk rating whether the receivable is a lease or a loan. The following tables present the amortized cost basis for client financing receivables by credit quality indicator at December 31, 2023 and 2022, respectively. Receivables with a credit quality indicator ranging from Aaa to Baa3 are considered investment grade. All others are considered non-investment grade. The credit quality indicators reflect mitigating credit enhancement actions taken by customers which reduce the risk to IBM. Gross write-offs by vintage year at December 31, 2023 were not material. ($ 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 ($ in millions) Americas EMEA Asia Pacific At December 31, 2022: Aaa - Baa3 Ba1 - C Aaa - Baa3 Ba1 - C Aaa - Baa3 Ba1 - C Vintage year 2022 $ 3,316 $ 1,097 $ 1,447 $ 704 $ 799 $ 96 2021 1,197 323 451 159 203 65 2020 559 217 258 158 210 49 2019 251 91 161 99 127 22 2018 128 26 42 16 84 21 2017 and prior 32 45 14 38 12 17 Total $ 5,482 $ 1,800 $ 2,373 $ 1,173 $ 1,434 $ 269 Modifications and Troubled Debt Restructurings The company did not have any significant modifications due to financial difficulty for the year ended December 31, 2023. The company did not have any significant troubled debt restructurings for the year ended December 31, 2022 |
Property, Plant & Equipment
Property, Plant & Equipment | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant & Equipment | PROPERTY, PLANT & EQUIPMENT ($ in millions) At December 31: 2023 2022 Land and land improvements $ 182 $ 213 Buildings and building and leasehold improvements 5,333 5,678 Information technology equipment 9,223 9,643 Production, engineering, office and other equipment 3,385 3,161 Total—gross 18,122 18,695 Less: Accumulated depreciation 12,621 13,361 Total—net $ 5,501 $ 5,334 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Leases | LEASES Accounting for Leases as a Lessee The following table presents the various components of lease costs. ($ in millions) For the year ended December 31: 2023 2022 2021 Finance lease cost $ 114 $ 67 $ 52 Operating lease cost 1,013 1,050 1,126 Short-term lease cost 9 7 21 Variable lease cost 331 262 336 Sublease income (61) (72) (46) Total lease cost $ 1,406 $ 1,315 $ 1,489 The company recorded net gains on sale and leaseback transactions of $145 million, $41 million and $7 million for the years ended December 31, 2023, 2022 and 2021, respectively. The following table presents supplemental information relating to the cash flows arising from lease transactions. Cash payments related to variable lease costs and short-term leases are not included in the measurement of operating and finance lease liabilities, and, as such, are excluded from the amounts below. ($ in millions) For the year ended December 31: 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash outflows from finance leases $ 16 $ 9 $ 8 Financing cash outflows from finance leases 75 55 42 Operating cash outflows from operating leases 961 1,020 1,135 ROU assets obtained in exchange for new finance lease liabilities (1) 355 196 46 ROU assets obtained in exchange for new operating lease liabilities (1) 1,220 705 779 (1) Includes the impact of currency. The following table presents the weighted-average lease term and discount rate for finance and operating leases. At December 31: 2023 2022 Finance leases Weighted-average remaining lease term (in years) 5.1 3.7 Weighted-average discount rate 4.62 % 3.57 % Operating leases Weighted-average remaining lease term (in years) 6.2 4.5 Weighted-average discount rate 4.46 % 3.77 % The following table presents a maturity analysis of expected undiscounted cash flows for operating and finance leases on an annual basis for the next five years and thereafter. ($ in millions) 2024 2025 2026 2027 2028 Thereafter Imputed Interest (1) Total (2) Finance leases $ 145 $ 126 $ 90 $ 80 $ 61 $ 78 $ (82) $ 499 Operating leases 948 761 616 452 281 890 (560) 3,389 (1) Imputed interest represents the difference between undiscounted cash flows and discounted cash flows. (2) The company entered into lease agreements for certain facilities and equipment with payments totaling approximately $247 million that have not yet commenced as of December 31, 2023, and therefore are not included in this table. The following table presents information on the company’s finance leases recognized in the Consolidated Balance Sheet. ($ in millions) At December 31: 2023 2022 ROU Assets—Property, plant and equipment $ 481 $ 223 Lease Liabilities Short-term debt 121 75 Long-term debt 379 164 Accounting for Leases as a Lessor The following table presents amounts included in the Consolidated Income Statement related to lessor activity. ($ in millions) For the year ended December 31: 2023 2022 2021 Lease income—sales-type and direct financing leases Sales-type lease selling price $ 1,280 $ 1,636 $ 1,355 Less: Carrying value of underlying assets (1) (245) (385) (300) Gross profit 1,034 1,251 1,055 Interest income on lease receivables 242 200 179 Total sales-type and direct financing lease income 1,276 1,451 1,234 Lease income—operating leases 93 116 169 Variable lease income 68 87 120 Total lease income $ 1,437 $ 1,653 $ 1,523 (1) Excludes unguaranteed residual value. Sales-Type and Direct Financing Leases At December 31, 2023 and 2022, the unguaranteed residual values of sales-type and direct financing leases were $458 million and $422 million, respectively. Refer to note L, “Financing Receivables,” for additional information on the company’s net investment in leases. For the years ended December 31, 2023 and 2022, impairment of residual values was immaterial. The following table presents a maturity analysis of the lease payments due to IBM on sales-type and direct financing leases over the next five years and thereafter, as well as a reconciliation of the undiscounted cash flows to the financing receivables recognized in the Consolidated Balance Sheet at December 31, 2023. ($ in millions) Total 2024 $ 1,735 2025 1,360 2026 713 2027 353 2028 91 Thereafter 9 Total undiscounted cash flows $ 4,261 Present value of lease payments (recognized as financing receivables) (1) 3,832 Difference between undiscounted cash flows and discounted cash flows $ 429 (1) The present value of the lease payments will not equal the financing receivables balances in the Consolidated Balance Sheet due to certain items including IDCs, allowance for credit losses and residual values, which are included in the financing receivable balance, but are not included in the future lease paym |
Leases | LEASES Accounting for Leases as a Lessee The following table presents the various components of lease costs. ($ in millions) For the year ended December 31: 2023 2022 2021 Finance lease cost $ 114 $ 67 $ 52 Operating lease cost 1,013 1,050 1,126 Short-term lease cost 9 7 21 Variable lease cost 331 262 336 Sublease income (61) (72) (46) Total lease cost $ 1,406 $ 1,315 $ 1,489 The company recorded net gains on sale and leaseback transactions of $145 million, $41 million and $7 million for the years ended December 31, 2023, 2022 and 2021, respectively. The following table presents supplemental information relating to the cash flows arising from lease transactions. Cash payments related to variable lease costs and short-term leases are not included in the measurement of operating and finance lease liabilities, and, as such, are excluded from the amounts below. ($ in millions) For the year ended December 31: 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash outflows from finance leases $ 16 $ 9 $ 8 Financing cash outflows from finance leases 75 55 42 Operating cash outflows from operating leases 961 1,020 1,135 ROU assets obtained in exchange for new finance lease liabilities (1) 355 196 46 ROU assets obtained in exchange for new operating lease liabilities (1) 1,220 705 779 (1) Includes the impact of currency. The following table presents the weighted-average lease term and discount rate for finance and operating leases. At December 31: 2023 2022 Finance leases Weighted-average remaining lease term (in years) 5.1 3.7 Weighted-average discount rate 4.62 % 3.57 % Operating leases Weighted-average remaining lease term (in years) 6.2 4.5 Weighted-average discount rate 4.46 % 3.77 % The following table presents a maturity analysis of expected undiscounted cash flows for operating and finance leases on an annual basis for the next five years and thereafter. ($ in millions) 2024 2025 2026 2027 2028 Thereafter Imputed Interest (1) Total (2) Finance leases $ 145 $ 126 $ 90 $ 80 $ 61 $ 78 $ (82) $ 499 Operating leases 948 761 616 452 281 890 (560) 3,389 (1) Imputed interest represents the difference between undiscounted cash flows and discounted cash flows. (2) The company entered into lease agreements for certain facilities and equipment with payments totaling approximately $247 million that have not yet commenced as of December 31, 2023, and therefore are not included in this table. The following table presents information on the company’s finance leases recognized in the Consolidated Balance Sheet. ($ in millions) At December 31: 2023 2022 ROU Assets—Property, plant and equipment $ 481 $ 223 Lease Liabilities Short-term debt 121 75 Long-term debt 379 164 Accounting for Leases as a Lessor The following table presents amounts included in the Consolidated Income Statement related to lessor activity. ($ in millions) For the year ended December 31: 2023 2022 2021 Lease income—sales-type and direct financing leases Sales-type lease selling price $ 1,280 $ 1,636 $ 1,355 Less: Carrying value of underlying assets (1) (245) (385) (300) Gross profit 1,034 1,251 1,055 Interest income on lease receivables 242 200 179 Total sales-type and direct financing lease income 1,276 1,451 1,234 Lease income—operating leases 93 116 169 Variable lease income 68 87 120 Total lease income $ 1,437 $ 1,653 $ 1,523 (1) Excludes unguaranteed residual value. Sales-Type and Direct Financing Leases At December 31, 2023 and 2022, the unguaranteed residual values of sales-type and direct financing leases were $458 million and $422 million, respectively. Refer to note L, “Financing Receivables,” for additional information on the company’s net investment in leases. For the years ended December 31, 2023 and 2022, impairment of residual values was immaterial. The following table presents a maturity analysis of the lease payments due to IBM on sales-type and direct financing leases over the next five years and thereafter, as well as a reconciliation of the undiscounted cash flows to the financing receivables recognized in the Consolidated Balance Sheet at December 31, 2023. ($ in millions) Total 2024 $ 1,735 2025 1,360 2026 713 2027 353 2028 91 Thereafter 9 Total undiscounted cash flows $ 4,261 Present value of lease payments (recognized as financing receivables) (1) 3,832 Difference between undiscounted cash flows and discounted cash flows $ 429 (1) The present value of the lease payments will not equal the financing receivables balances in the Consolidated Balance Sheet due to certain items including IDCs, allowance for credit losses and residual values, which are included in the financing receivable balance, but are not included in the future lease paym |
Leases | LEASES Accounting for Leases as a Lessee The following table presents the various components of lease costs. ($ in millions) For the year ended December 31: 2023 2022 2021 Finance lease cost $ 114 $ 67 $ 52 Operating lease cost 1,013 1,050 1,126 Short-term lease cost 9 7 21 Variable lease cost 331 262 336 Sublease income (61) (72) (46) Total lease cost $ 1,406 $ 1,315 $ 1,489 The company recorded net gains on sale and leaseback transactions of $145 million, $41 million and $7 million for the years ended December 31, 2023, 2022 and 2021, respectively. The following table presents supplemental information relating to the cash flows arising from lease transactions. Cash payments related to variable lease costs and short-term leases are not included in the measurement of operating and finance lease liabilities, and, as such, are excluded from the amounts below. ($ in millions) For the year ended December 31: 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash outflows from finance leases $ 16 $ 9 $ 8 Financing cash outflows from finance leases 75 55 42 Operating cash outflows from operating leases 961 1,020 1,135 ROU assets obtained in exchange for new finance lease liabilities (1) 355 196 46 ROU assets obtained in exchange for new operating lease liabilities (1) 1,220 705 779 (1) Includes the impact of currency. The following table presents the weighted-average lease term and discount rate for finance and operating leases. At December 31: 2023 2022 Finance leases Weighted-average remaining lease term (in years) 5.1 3.7 Weighted-average discount rate 4.62 % 3.57 % Operating leases Weighted-average remaining lease term (in years) 6.2 4.5 Weighted-average discount rate 4.46 % 3.77 % The following table presents a maturity analysis of expected undiscounted cash flows for operating and finance leases on an annual basis for the next five years and thereafter. ($ in millions) 2024 2025 2026 2027 2028 Thereafter Imputed Interest (1) Total (2) Finance leases $ 145 $ 126 $ 90 $ 80 $ 61 $ 78 $ (82) $ 499 Operating leases 948 761 616 452 281 890 (560) 3,389 (1) Imputed interest represents the difference between undiscounted cash flows and discounted cash flows. (2) The company entered into lease agreements for certain facilities and equipment with payments totaling approximately $247 million that have not yet commenced as of December 31, 2023, and therefore are not included in this table. The following table presents information on the company’s finance leases recognized in the Consolidated Balance Sheet. ($ in millions) At December 31: 2023 2022 ROU Assets—Property, plant and equipment $ 481 $ 223 Lease Liabilities Short-term debt 121 75 Long-term debt 379 164 Accounting for Leases as a Lessor The following table presents amounts included in the Consolidated Income Statement related to lessor activity. ($ in millions) For the year ended December 31: 2023 2022 2021 Lease income—sales-type and direct financing leases Sales-type lease selling price $ 1,280 $ 1,636 $ 1,355 Less: Carrying value of underlying assets (1) (245) (385) (300) Gross profit 1,034 1,251 1,055 Interest income on lease receivables 242 200 179 Total sales-type and direct financing lease income 1,276 1,451 1,234 Lease income—operating leases 93 116 169 Variable lease income 68 87 120 Total lease income $ 1,437 $ 1,653 $ 1,523 (1) Excludes unguaranteed residual value. Sales-Type and Direct Financing Leases At December 31, 2023 and 2022, the unguaranteed residual values of sales-type and direct financing leases were $458 million and $422 million, respectively. Refer to note L, “Financing Receivables,” for additional information on the company’s net investment in leases. For the years ended December 31, 2023 and 2022, impairment of residual values was immaterial. The following table presents a maturity analysis of the lease payments due to IBM on sales-type and direct financing leases over the next five years and thereafter, as well as a reconciliation of the undiscounted cash flows to the financing receivables recognized in the Consolidated Balance Sheet at December 31, 2023. ($ in millions) Total 2024 $ 1,735 2025 1,360 2026 713 2027 353 2028 91 Thereafter 9 Total undiscounted cash flows $ 4,261 Present value of lease payments (recognized as financing receivables) (1) 3,832 Difference between undiscounted cash flows and discounted cash flows $ 429 (1) The present value of the lease payments will not equal the financing receivables balances in the Consolidated Balance Sheet due to certain items including IDCs, allowance for credit losses and residual values, which are included in the financing receivable balance, but are not included in the future lease paym |
Leases | LEASES Accounting for Leases as a Lessee The following table presents the various components of lease costs. ($ in millions) For the year ended December 31: 2023 2022 2021 Finance lease cost $ 114 $ 67 $ 52 Operating lease cost 1,013 1,050 1,126 Short-term lease cost 9 7 21 Variable lease cost 331 262 336 Sublease income (61) (72) (46) Total lease cost $ 1,406 $ 1,315 $ 1,489 The company recorded net gains on sale and leaseback transactions of $145 million, $41 million and $7 million for the years ended December 31, 2023, 2022 and 2021, respectively. The following table presents supplemental information relating to the cash flows arising from lease transactions. Cash payments related to variable lease costs and short-term leases are not included in the measurement of operating and finance lease liabilities, and, as such, are excluded from the amounts below. ($ in millions) For the year ended December 31: 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash outflows from finance leases $ 16 $ 9 $ 8 Financing cash outflows from finance leases 75 55 42 Operating cash outflows from operating leases 961 1,020 1,135 ROU assets obtained in exchange for new finance lease liabilities (1) 355 196 46 ROU assets obtained in exchange for new operating lease liabilities (1) 1,220 705 779 (1) Includes the impact of currency. The following table presents the weighted-average lease term and discount rate for finance and operating leases. At December 31: 2023 2022 Finance leases Weighted-average remaining lease term (in years) 5.1 3.7 Weighted-average discount rate 4.62 % 3.57 % Operating leases Weighted-average remaining lease term (in years) 6.2 4.5 Weighted-average discount rate 4.46 % 3.77 % The following table presents a maturity analysis of expected undiscounted cash flows for operating and finance leases on an annual basis for the next five years and thereafter. ($ in millions) 2024 2025 2026 2027 2028 Thereafter Imputed Interest (1) Total (2) Finance leases $ 145 $ 126 $ 90 $ 80 $ 61 $ 78 $ (82) $ 499 Operating leases 948 761 616 452 281 890 (560) 3,389 (1) Imputed interest represents the difference between undiscounted cash flows and discounted cash flows. (2) The company entered into lease agreements for certain facilities and equipment with payments totaling approximately $247 million that have not yet commenced as of December 31, 2023, and therefore are not included in this table. The following table presents information on the company’s finance leases recognized in the Consolidated Balance Sheet. ($ in millions) At December 31: 2023 2022 ROU Assets—Property, plant and equipment $ 481 $ 223 Lease Liabilities Short-term debt 121 75 Long-term debt 379 164 Accounting for Leases as a Lessor The following table presents amounts included in the Consolidated Income Statement related to lessor activity. ($ in millions) For the year ended December 31: 2023 2022 2021 Lease income—sales-type and direct financing leases Sales-type lease selling price $ 1,280 $ 1,636 $ 1,355 Less: Carrying value of underlying assets (1) (245) (385) (300) Gross profit 1,034 1,251 1,055 Interest income on lease receivables 242 200 179 Total sales-type and direct financing lease income 1,276 1,451 1,234 Lease income—operating leases 93 116 169 Variable lease income 68 87 120 Total lease income $ 1,437 $ 1,653 $ 1,523 (1) Excludes unguaranteed residual value. Sales-Type and Direct Financing Leases At December 31, 2023 and 2022, the unguaranteed residual values of sales-type and direct financing leases were $458 million and $422 million, respectively. Refer to note L, “Financing Receivables,” for additional information on the company’s net investment in leases. For the years ended December 31, 2023 and 2022, impairment of residual values was immaterial. The following table presents a maturity analysis of the lease payments due to IBM on sales-type and direct financing leases over the next five years and thereafter, as well as a reconciliation of the undiscounted cash flows to the financing receivables recognized in the Consolidated Balance Sheet at December 31, 2023. ($ in millions) Total 2024 $ 1,735 2025 1,360 2026 713 2027 353 2028 91 Thereafter 9 Total undiscounted cash flows $ 4,261 Present value of lease payments (recognized as financing receivables) (1) 3,832 Difference between undiscounted cash flows and discounted cash flows $ 429 (1) The present value of the lease payments will not equal the financing receivables balances in the Consolidated Balance Sheet due to certain items including IDCs, allowance for credit losses and residual values, which are included in the financing receivable balance, but are not included in the future lease paym |
Leases | LEASES Accounting for Leases as a Lessee The following table presents the various components of lease costs. ($ in millions) For the year ended December 31: 2023 2022 2021 Finance lease cost $ 114 $ 67 $ 52 Operating lease cost 1,013 1,050 1,126 Short-term lease cost 9 7 21 Variable lease cost 331 262 336 Sublease income (61) (72) (46) Total lease cost $ 1,406 $ 1,315 $ 1,489 The company recorded net gains on sale and leaseback transactions of $145 million, $41 million and $7 million for the years ended December 31, 2023, 2022 and 2021, respectively. The following table presents supplemental information relating to the cash flows arising from lease transactions. Cash payments related to variable lease costs and short-term leases are not included in the measurement of operating and finance lease liabilities, and, as such, are excluded from the amounts below. ($ in millions) For the year ended December 31: 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash outflows from finance leases $ 16 $ 9 $ 8 Financing cash outflows from finance leases 75 55 42 Operating cash outflows from operating leases 961 1,020 1,135 ROU assets obtained in exchange for new finance lease liabilities (1) 355 196 46 ROU assets obtained in exchange for new operating lease liabilities (1) 1,220 705 779 (1) Includes the impact of currency. The following table presents the weighted-average lease term and discount rate for finance and operating leases. At December 31: 2023 2022 Finance leases Weighted-average remaining lease term (in years) 5.1 3.7 Weighted-average discount rate 4.62 % 3.57 % Operating leases Weighted-average remaining lease term (in years) 6.2 4.5 Weighted-average discount rate 4.46 % 3.77 % The following table presents a maturity analysis of expected undiscounted cash flows for operating and finance leases on an annual basis for the next five years and thereafter. ($ in millions) 2024 2025 2026 2027 2028 Thereafter Imputed Interest (1) Total (2) Finance leases $ 145 $ 126 $ 90 $ 80 $ 61 $ 78 $ (82) $ 499 Operating leases 948 761 616 452 281 890 (560) 3,389 (1) Imputed interest represents the difference between undiscounted cash flows and discounted cash flows. (2) The company entered into lease agreements for certain facilities and equipment with payments totaling approximately $247 million that have not yet commenced as of December 31, 2023, and therefore are not included in this table. The following table presents information on the company’s finance leases recognized in the Consolidated Balance Sheet. ($ in millions) At December 31: 2023 2022 ROU Assets—Property, plant and equipment $ 481 $ 223 Lease Liabilities Short-term debt 121 75 Long-term debt 379 164 Accounting for Leases as a Lessor The following table presents amounts included in the Consolidated Income Statement related to lessor activity. ($ in millions) For the year ended December 31: 2023 2022 2021 Lease income—sales-type and direct financing leases Sales-type lease selling price $ 1,280 $ 1,636 $ 1,355 Less: Carrying value of underlying assets (1) (245) (385) (300) Gross profit 1,034 1,251 1,055 Interest income on lease receivables 242 200 179 Total sales-type and direct financing lease income 1,276 1,451 1,234 Lease income—operating leases 93 116 169 Variable lease income 68 87 120 Total lease income $ 1,437 $ 1,653 $ 1,523 (1) Excludes unguaranteed residual value. Sales-Type and Direct Financing Leases At December 31, 2023 and 2022, the unguaranteed residual values of sales-type and direct financing leases were $458 million and $422 million, respectively. Refer to note L, “Financing Receivables,” for additional information on the company’s net investment in leases. For the years ended December 31, 2023 and 2022, impairment of residual values was immaterial. The following table presents a maturity analysis of the lease payments due to IBM on sales-type and direct financing leases over the next five years and thereafter, as well as a reconciliation of the undiscounted cash flows to the financing receivables recognized in the Consolidated Balance Sheet at December 31, 2023. ($ in millions) Total 2024 $ 1,735 2025 1,360 2026 713 2027 353 2028 91 Thereafter 9 Total undiscounted cash flows $ 4,261 Present value of lease payments (recognized as financing receivables) (1) 3,832 Difference between undiscounted cash flows and discounted cash flows $ 429 (1) The present value of the lease payments will not equal the financing receivables balances in the Consolidated Balance Sheet due to certain items including IDCs, allowance for credit losses and residual values, which are included in the financing receivable balance, but are not included in the future lease paym |
Intangible Assets Including Goo
Intangible Assets Including Goodwill | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets Including Goodwill | INTANGIBLE ASSETS INCLUDING GOODWILL Intangible Assets The following table presents the company’s intangible asset balances by major asset class. ($ in millions) At December 31, 2023: 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 ($ in millions) At December 31, 2022: Gross Carrying Accumulated Net Carrying Amount (1) Intangible asset class Capitalized software $ 1,650 $ (705) $ 945 Client relationships 8,559 (2,951) 5,608 Completed technology 5,220 (2,045) 3,175 Patents/trademarks 2,140 (688) 1,452 Other (2) 19 (15) 4 Total $ 17,588 $ (6,404) $ 11,184 (1) Amounts as of December 31, 2023 and December 31, 2022 include an increase in net intangible asset balance of $50 million and a decrease in net intangible asset balance of $198 million, respectively, due to foreign currency translation. (2) Other intangibles are primarily acquired proprietary and nonproprietary data, business processes, methodologies and systems. There was no impairment of intangible assets recorded in 2023 and 2022. The net carrying amount of intangible assets decreased $147 million during the year ended December 31, 2023, primarily due to intangible asset amortization, partially offset by additions of acquired intangibles of $1,509 million primarily related to the acquisition of Apptio, Inc. and capitalized software. The aggregate intangible amortization expense was $2,287 million and $2,397 million for the years ended December 31, 2023 and 2022, respectively. In addition, in 2023 and 2022, respectively, the company retired $1,505 million and $1,301 million of fully amortized intangible assets, impacting both the gross carrying amount and accumulated amortization by this amount. The future amortization expense relating to intangible assets currently recorded in the Consolidated Balance Sheet is estimated to be the following at December 31, 2023: ($ in millions) Capitalized Acquired Total 2024 $ 514 $ 1,743 $ 2,257 2025 260 1,713 1,973 2026 100 1,690 1,790 2027 — 1,671 1,671 2028 — 1,368 1,368 Thereafter — 1,979 1,979 Goodwill The changes in the goodwill balances by reportable segment for the years ended December 31, 2023 and 2022 are as follows: ($ in millions) Segment Balance at January 1, 2023 Goodwill Purchase Divestitures Foreign Currency Translation and Other Adjustments (1) Balance at December 31, 2023 Software $ 43,657 $ 3,538 $ (17) $ — $ 214 $ 47,392 Consulting 7,928 403 2 — 69 8,403 Infrastructure 4,363 12 — — 8 4,384 Other — — — — — — Total $ 55,949 $ 3,953 $ (15) $ — $ 291 $ 60,178 ($ in millions) Segment Balance at January 1, 2022 Goodwill Purchase Divestitures Foreign Currency Translation and Other Adjustments (1) Balance at December 31, 2022 Software $ 43,966 $ 568 $ (118) $ — $ (760) $ 43,657 Consulting 6,797 1,366 (42) — (192) 7,928 Infrastructure 4,396 — — (1) (32) 4,363 Other (2) 484 — — (484) — — Total $ 55,643 $ 1,934 $ (159) $ (485) $ (984) $ 55,949 (1) Primarily driven by foreign currency translation. (2) The company derecognized goodwill related to the divestiture of its healthcare software assets in the second quarter of 2022. There were no goodwill impairment losses recorded during 2023 or 2022 and the company has no accumulated impairment losses. Purchase price adjustments recorded in 2023 and 2022 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 2023 were not material. Net purchase price adjustments recorded in 2022 primarily related to deferred tax assets and liabilities associated with the Turbonomic acquisition. |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Borrowings | BORROWINGS Short-Term Debt The company’s total short-term debt at December 31, 2023 and December 31, 2022 was $6,426 million and $4,760 million, respectively, and primarily consisted of current maturities of long-term debt detailed in “Long-Term Debt” below. Long-Term Debt Pre-Swap Borrowing ($ in millions) At December 31: Maturities 2023 2022 U.S. dollar debt (weighted-average interest rate at December 31, 2023): (1) 3.4% 2023 $ — $ 1,529 3.3% 2024 5,003 5,009 5.1% 2025 1,601 1,603 3.5% 2026 5,201 4,351 3.1% 2027 3,619 3,620 5.0% 2028 1,313 313 3.5% 2029 3,250 3,250 2.0% 2030 1,350 1,350 4.4% 2032 1,850 1,850 4.8% 2033 750 — 8.0% 2038 83 83 4.5% 2039 2,745 2,745 2.9% 2040 650 650 4.0% 2042 1,107 1,107 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 — 7.1% 2096 316 316 $ 35,317 $ 33,605 Euro debt (weighted-average interest rate at December 31, 2023): (1) 0.7% 2023 $ — $ 2,937 1.1% 2024 829 801 1.6% 2025 3,315 3,204 2.3% 2027 2,210 1,068 0.7% 2028 1,989 1,922 1.5% 2029 1,105 1,068 0.9% 2030 1,105 1,068 2.7% 2031 2,762 1,335 0.7% 2032 1,768 1,709 1.3% 2034 1,105 1,068 3.8% 2035 1,105 — 1.2% 2040 939 908 4.0% 2043 1,105 — $ 19,335 $ 17,087 Other currencies (weighted-average interest rate at December 31, 2023, in parentheses): (1) Pound sterling (4.9%) 2038 $ 955 $ — Japanese yen (0.5%) 2024–2028 1,251 694 Other (14.2%) 2024–2026 241 361 $ 57,099 $ 51,747 Finance lease obligations (4.5%) 2024–2034 499 239 $ 57,598 $ 51,986 Less: net unamortized discount 838 835 Less: net unamortized debt issuance costs 154 138 Add: fair value adjustment (2) (60) (73) $ 56,546 $ 50,940 Less: current maturities 6,425 4,751 Total $ 50,121 $ 46,189 (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 all of its debt covenants and provides periodic certifications to its lenders. The failure to comply with its debt covenants could constitute an event of default with respect to the debt to which such provisions apply. If certain events of default were to occur, the principal and interest on the debt to which such event of default applied would become immediately due and payable. In the first quarter of 2023, the company issued $0.7 billion of Japanese yen floating-rate syndicated bank loans with a maturity of 5 years; $4.6 billion of Euro fixed-rate notes in tranches with maturities ranging from 4 to 20 years and coupons ranging from 3.375 to 4 percent; $0.9 billion of Pound sterling fixed-rate notes with a maturity of 15 years and a coupon of 4.875 percent; and $3.25 billion of U.S. dollar fixed-rate notes in tranches with maturities ranging from 3 to 30 years and coupons ranging from 4.5 to 5.1 percent. Post-Swap Borrowing (Long-Term Debt, Including Current Portion) ($ in millions) 2023 2022 At December 31: Amount Weighted-Average Amount Weighted-Average Fixed-rate debt $ 48,803 3.0 % $ 43,898 2.7 % Floating-rate debt (1) 7,743 6.1 % 7,042 5.9 % Total $ 56,546 $ 50,940 (1) Includes $6,725 million and $6,525 million in 2023 and 2022, respectively, of notional interest-rate swaps that effectively convert fixed-rate long-term debt into floating-rate debt. Refer to note T, “Derivative Financial Instruments,” for additional information. Pre-swap annual contractual obligations of long-term debt outstanding at December 31, 2023, are as follows: ($ in millions) Total 2024 $ 6,427 2025 5,090 2026 5,624 2027 5,898 2028 3,959 Thereafter 30,600 Total $ 57,598 Interest on Debt ($ in millions) For the year ended December 31: 2023 2022 2021 Cost of financing $ 334 $ 346 $ 392 Interest expense 1,607 1,216 1,155 Interest capitalized 9 5 3 Total interest paid and accrued $ 1,949 $ 1,566 $ 1,550 Refer to the related discussion in note D, “Segments,” for interest expense of the Financing segment. Refer to note T, “Derivative Financial Instruments,” for a discussion of the use of foreign currency denominated debt designated as a hedge of net investment, as well as a discussion of the use of currency and interest-rate swaps in the company’s debt risk management program. Lines of Credit On June 15, 2023, the company amended its existing $2.5 billion Three-Year Credit Agreement and $7.5 billion Five-Year Credit Agreement (the Credit Agreements) to extend the maturity dates to June 20, 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. The total expense recorded by the company related to these agreements was $8 million, $11 million and $12 million in 2023, 2022 and 2021, respectively. Subject to certain conditions stated in the Credit Agreements, the borrower may borrow, prepay and re-borrow amounts under the Credit Agreements at any time during the term of such agreements. Funds borrowed may be used for the general corporate purposes of the borrower. Interest rates on borrowings under the Credit Agreements will be based on prevailing market interest rates, as further described in the Credit Agreements. The Credit Agreements contain customary representations and warranties, covenants, events of default, and indemnification provisions. The company believes that circumstances that might give rise to breach of these covenants or an event of default, as specified in the Credit Agreements, are remote. As of December 31, 2023, there were no borrowings by the company under the Credit Agreements. The company also has other committed lines of credit in some of the geographies which are not significant in the aggregate. Interest rates and other terms of borrowing under these lines of credit vary from country to country, depending on local market conditions. As of December 31, 2023, there were no material borrowings by the company under these credit facilit |
Other Liabilities
Other Liabilities | 12 Months Ended |
Dec. 31, 2023 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | OTHER LIABILITIES ($ in millions) At December 31: 2023 2022 Income tax reserves (1) $ 6,916 $ 6,404 Deferred taxes 1,146 2,292 Excess 401(k) Plus Plan 1,437 1,307 Disability benefits 308 303 Derivative liabilities 299 488 Workforce reductions 526 524 Environmental accruals 206 243 Other (2) 639 681 Total $ 11,475 $ 12,243 (1) Refer to note H, “Taxes,” for additional information. (2) Prior-period amounts have been reclassified to conform to the change in 2023 presentation. In response to changing business needs, the company periodically takes workforce reduction actions to improve productivity, cost competitiveness and to rebalance skills. The noncurrent contractually obligated future payments associated with these activities are reflected in the workforce reductions caption in the previous table. The noncurrent liabilities are workforce accruals primarily related to terminated employees who are no longer working for the company and who were granted annual payments to supplement their incomes in certain countries. Depending on the individual country’s legal requirements, these required payments will continue until the former employee begins receiving pension benefits or passes away. The total amounts accrued for workforce reductions, including amounts classified as other accrued expenses and liabilities in the Consolidated Balance Sheet, were $725 million and $701 million at December 31, 2023 and 2022, respectively. The company employs extensive internal environmental protection programs that primarily are preventive in nature. The company also participates in environmental assessments and cleanups at a number of locations, including operating facilities, previously owned facilities and Superfund sites. The company’s maximum exposure for all environmental liabilities cannot be estimated and no amounts have been recorded for non-ARO environmental liabilities that are not probable or estimable. The total amounts accrued for non-ARO environmental liabilities, including amounts classified as current As of December 31, 2023, the company was unable to estimate the range of settlement dates and the related probabilities for certain asbestos remediation AROs. These conditional AROs are primarily related to the encapsulated structural fireproofing that is not subject to abatement unless the buildings are demolished and non-encapsulated asbestos that the company would remediate only if it performed major renovations of certain existing buildings. Because these conditional obligations have indeterminate settlement dates, the company could not develop a reasonable estimate of their fair values. The company will continue to assess its ability to estimate fair values at each future reporting date. The related liability will be recognized once sufficient additional information becomes available. The total amounts accrued for ARO liabilities, including amounts classified as current in the Consolidated Balance Sheet, were $113 million and $107 million at December 31, 2023 and 2022, respectively. |
Commitments & Contingencies
Commitments & Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments & Contingencies | COMMITMENTS & CONTINGENCIES Commitments The company’s extended lines of credit to third-party entities include unused amounts of $1.4 billion and $1.6 billion at December 31, 2023 and 2022, 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 $1.9 billion and $2.1 billion at December 31, 2023 and 2022, respectively. The company collectively evaluates the allowance for these arrangements using a provision methodology consistent with the portfolio of the commitments. Refer to note A, “Significant Accounting Policies,” for additional information. The allowance for these commitments is recorded in other liabilities in the Consolidated Balance Sheet and was not material at December 31, 2023 and 2022. The company has applied the guidance requiring a guarantor to disclose certain types of guarantees, even if the likelihood of requiring the guarantor’s performance is remote. The following is a description of arrangements in which the company is the guarantor. The company is a party to a variety of agreements pursuant to which it may be obligated to indemnify the other party with respect to certain matters. Typically, these obligations arise in the context of contracts entered into by the company, under which the company customarily agrees to hold the party harmless against losses arising from a breach of representations and covenants related to such matters as title to the assets sold, certain intellectual property rights, specified environmental matters, third-party performance of nonfinancial contractual obligations and certain income taxes. In each of these circumstances, payment by the company is conditioned on the other party making a claim pursuant to the procedures specified in the particular contract, the procedures of which typically allow the company to challenge the other party’s claims. While indemnification provisions typically do not include a contractual maximum on the company’s payment, the company’s obligations under these agreements may be limited in terms of time and/or nature of claim, and in some instances, the company may have recourse against third parties for certain payments made by the company. It is not possible to predict the maximum potential amount of future payments under these or similar agreements due to the conditional nature of the company’s obligations and the unique facts and circumstances involved in each particular agreement. Historically, payments made by the company under these agreements have not had a material effect on the company’s business, financial condition or results of operations. In addition, the company guarantees certain loans and financial commitments. The maximum potential future payment under these financial guarantees and the fair value of these guarantees recognized in the Consolidated Balance Sheet at December 31, 2023 and 2022 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 ($ in millions) 2023 2022 Balance at January 1 $ 79 $ 77 Current period accruals 84 84 Accrual adjustments to reflect experience (14) (2) Charges incurred (83) (81) Balance at December 31 $ 65 $ 79 Extended Warranty Liability (Deferred Income) ($ in millions) 2023 2022 Balance at January 1 $ 272 $ 350 Revenue deferred for new extended warranty contracts 70 100 Amortization of deferred revenue (158) (163) Other (1) 0 (15) Balance at December 31 $ 184 $ 272 Current portion $ 110 $ 137 Noncurrent portion $ 74 $ 135 (1) Other consists primarily of foreign currency translation adjustments. Contingencies As a company with a substantial employee population and with clients in more than 175 countries, IBM is involved, either as plaintiff or defendant, in a variety of ongoing claims, demands, suits, investigations, tax matters and proceedings that arise from time to time in the ordinary course of its business. The company is a leader in the information technology industry and, as such, has been and will continue to be subject to claims challenging its IP rights and associated products and offerings, including claims of copyright and patent infringement and violations of trade secrets and other IP rights. In addition, the company enforces its own IP against infringement, through license negotiations, lawsuits or otherwise. Further, given the rapidly evolving external landscape of cybersecurity, AI, privacy and data protection laws, regulations and threat actors, the company and its clients have been and will continue to be subject to actions or proceedings in various jurisdictions. Also, as is typical for companies of IBM’s scope and scale, the company is party to actions and proceedings in various jurisdictions involving a wide range of labor and employment issues (including matters related to contested employment decisions, country-specific labor and employment laws, and the company’s pension, retirement and other benefit plans), as well as actions with respect to contracts, product liability, cybersecurity, data privacy, securities, foreign operations, competition law and environmental matters. These actions may be commenced by a number of different parties, including competitors, clients, current or former employees, government and regulatory agencies, stockholders and representatives of the locations in which the company does business. Some of the actions to which the company is party may involve particularly complex technical issues, and some actions may raise novel questions under the laws of the various jurisdictions in which these matters arise. The company records a provision with respect to a claim, suit, investigation or proceeding when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Any recorded liabilities, including any changes to such liabilities for the years ended December 31, 2023, 2022 and 2021 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. 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 liabil |
Equity Activity
Equity Activity | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Equity Activity | EQUITY ACTIVITY The authorized capital stock of IBM consists of (i) 4,687,500,000 shares of common stock with a $0.20 per share par value, of which 915,013,646 shares were outstanding at December 31, 2023, and (ii) 150,000,000 shares of preferred stock with a $0.01 per share par value, whereby 75,000,000 shares have been designated as Series A Preferred Stock, of which 57,916,244 shares of Series A Preferred Stock were issued to a wholly owned subsidiary of the company but were not outstanding at December 31, 2023. The company does not intend to issue or transfer any shares of Series A Preferred Stock to any third parties. Stock Repurchases The Board of Directors authorizes the company to repurchase IBM common stock. The company suspended its share repurchase program at the time of the Red Hat acquisition in 2019. At December 31, 2023, $2,008 million of Board common stock repurchase authorization was available. Other Stock Transactions The company issued the following shares of common stock as part of its stock-based compensation plans and employees stock purchase plan: 9,794,240 shares in 2023, 8,539,072 shares in 2022, and 5,608,845 shares in 2021. The company issued 2,080,983 treasury shares in 2023, 2,512,300 treasury shares in 2022, and 2,093,243 treasury shares in 2021, as a result of restricted stock unit releases and exercises of stock options by employees of certain acquired businesses and by non-U.S. employees. Also, as part of the company’s stock-based compensation plans, 2,953,554 common shares at a cost of $402 million, 3,027,994 common shares at a cost of $407 million, and 2,286,912 common shares at a cost of $319 million in 2023, 2022 and 2021, respectively, were remitted by employees to the company in order to satisfy minimum statutory tax withholding requirements. These amounts are included in the treasury stock balance in the Consolidated Balance Sheet and the Consolidated Statement of Equity. Reclassifications and Taxes Related to Items of Other Comprehensive Income ($ in millions) For the year ended December 31, 2023: Before Tax Tax (Expense)/ Net of Tax Other comprehensive income/(loss) Foreign currency translation adjustments $ 3 $ 100 $ 103 Net changes related to available-for-sale securities Unrealized gains/(losses) arising during the period $ 0 $ 0 $ 0 Reclassification of (gains)/losses to other (income) and expense — — — Total net changes related to available-for-sale securities $ 0 $ 0 $ 0 Unrealized gains/(losses) on cash flow hedges Unrealized gains/(losses) arising during the period $ 207 $ (63) $ 144 Reclassification of (gains)/losses to: Cost of services 5 (1) 5 Cost of sales (22) 8 (14) Cost of financing 14 (3) 10 SG&A expense (12) 4 (8) Other (income) and expense (209) 53 (157) Interest expense 66 (17) 49 Total unrealized gains/(losses) on cash flow hedges $ 47 $ (19) $ 28 Retirement-related benefit plans (1) Prior service costs/(credits) $ 2 $ 0 $ 2 Net (losses)/gains arising during the period (3,115) 536 (2,579) Curtailments and settlements 5 (1) 4 Amortization of prior service (credits)/costs (9) 3 (6) Amortization of net (gains)/losses 515 (88) 427 Total retirement-related benefit plans $ (2,602) $ 450 $ (2,152) Other comprehensive income/(loss) $ (2,552) $ 531 $ (2,021) (1) These AOCI components are included in the computation of net periodic pension cost. Refer to note V, “Retirement-Related Benefits,” for additional information. ($ in millions) For the year ended December 31, 2022: Before Tax Tax (Expense)/ Net of Tax Other comprehensive income/(loss) Foreign currency translation adjustments $ 176 $ (406) $ (229) Net changes related to available-for-sale securities Unrealized gains/(losses) arising during the period $ (1) $ 0 $ (1) Reclassification of (gains)/losses to other (income) and expense — — — Total net changes related to available-for-sale securities $ (1) $ 0 $ (1) Unrealized gains/(losses) on cash flow hedges Unrealized gains/(losses) arising during the period $ 241 $ (64) $ 178 Reclassification of (gains)/losses to: Cost of services (24) 6 (18) Cost of sales (99) 28 (70) Cost of financing 24 (6) 18 SG&A expense (38) 11 (28) Other (income) and expense (349) 88 (261) Interest expense 86 (22) 64 Total unrealized gains/(losses) on cash flow hedges $ (158) $ 41 $ (117) Retirement-related benefit plans (1) Prior service costs/(credits) $ 463 $ (99) $ 364 Net (losses)/gains arising during the period 878 (183) 695 Curtailments and settlements 5,970 (1,490) 4,480 Amortization of prior service (credits)/costs 12 (3) 9 Amortization of net (gains)/losses 1,596 (304) 1,293 Total retirement-related benefit plans $ 8,919 $ (2,078) $ 6,841 Other comprehensive income/(loss) $ 8,936 $ (2,442) $ 6,494 (1) These AOCI components are included in the computation of net periodic pension cost and include the impact of a one-time, non-cash pension settlement charge of $5.9 billion ($4.4 billion net of tax). Refer to note V, “Retirement-Related Benefits,” for additional information. ($ in millions) For the year ended December 31, 2021: Before Tax Tax (Expense)/ Net of Tax Other comprehensive income/(loss) Foreign currency translation adjustments $ 987 $ (414) $ 573 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 $ 344 $ (89) $ 256 Reclassification of (gains)/losses to: Cost of services (43) 11 (32) Cost of sales 16 (3) 13 Cost of financing 22 (6) 17 SG&A expense 24 (6) 19 Other (income) and expense 157 (40) 118 Interest expense 65 (16) 49 Total unrealized gains/(losses) on cash flow hedges $ 587 $ (149) $ 438 Retirement-related benefit plans (1) Prior service costs/(credits) $ (51) $ (1) $ (52) Net (losses)/gains arising during the period 2,433 (601) 1,832 Curtailments and settlements 94 (11) 83 Amortization of prior service (credits)/costs 9 0 9 Amortization of net (gains)/losses 2,484 (528) 1,956 Total retirement-related benefit plans $ 4,969 $ (1,140) $ 3,828 Other comprehensive income/(loss) $ 6,542 $ (1,703) $ 4,839 (1) These AOCI components are included in the computation of net periodic pension cost. Refer to note V, “Retirement-Related Benefits,” for additional information. Accumulated Other Comprehensive Income/(Loss) (net of tax) ($ in millions) Net Unrealized Foreign Currency Translation Adjustments (1) Net Change Net Unrealized Accumulated December 31, 2020 $ (456) $ (4,665) $ (24,216) $ 0 $ (29,337) Other comprehensive income before reclassifications 256 573 1,780 0 2,608 Amount reclassified from accumulated other comprehensive income 183 — 2,049 — 2,231 Separation of Kyndryl — 730 534 — 1,264 Total change for the period 438 1,303 4,362 0 6,103 December 31, 2021 (18) (3,362) (19,854) (1) (23,234) Other comprehensive income before reclassifications 178 (229) 1,059 (1) 1,007 Amount reclassified from accumulated other comprehensive income (2) (295) — 5,782 — 5,487 Total change for the period (117) (229) 6,841 (1) 6,494 December 31, 2022 (135) (3,591) (13,013) (1) (16,740) Other comprehensive income before reclassifications 144 103 (2,577) 0 (2,331) Amount reclassified from accumulated other comprehensive income (115) — 425 — 310 Total change for the period 28 103 (2,152) 0 (2,021) December 31, 2023 $ (106) $ (3,488) $ (15,165) $ (1) $ (18,761) (1) Foreign currency translation adjustments are presented gross except for any associated hedges which are presented net of tax. (2) Net change in retirement-related benefit plans includes the impact of a one-time, non-cash pension settlement charge of $5.9 billion ($4.4 billion net of tax). Refer to note V, “Retirement-Related Benefits,” for additional information. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2023 | |
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. The amount recognized in other accounts receivable for the right to reclaim cash collateral was $11 million and $140 million at December 31, 2023 and 2022, respectively. The amount recognized in accounts payable for the obligation to return cash collateral was $7 million and $8 million at December 31, 2023 and 2022, respectively. The company restricts the use of cash collateral received to rehypothecation, and therefore reports it in restricted cash in the Consolidated Balance Sheet. The amount rehypothecated was $7 million and $8 million at December 31, 2023 and 2022, respectively. Additionally, if derivative exposures covered by a qualifying master netting agreement had been netted in the Consolidated Balance Sheet at December 31, 2023 and 2022, the total derivative asset and liability positions each would have been reduced by $235 million and $220 million, respectively. As discussed in note E, “Acquisitions and 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 year ended December 31, 2023, the company recorded an unrealized gain of $12 million in other (income) and expense in the Consolidated Income Statement. At December 31, 2023, the fair value of the call options was $62 million and is included in prepaid expenses and other current assets in the Consolidated Balance Sheet. On May 19, 2022, in connection with the disposition of 22.3 million shares of Kyndryl common stock, the company entered into a cash-settled swap that maintained IBM’s continued economic exposure in those shares. The notional value of the swap was $311 million. For the year ended December 31, 2022, IBM recognized a loss of $83 million related to the swap which was settled on November 2, 2022. 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 December 31, 2023 and 2022, the total notional amount of the company’s interest-rate swaps was $6.7 billion and $6.5 billion, respectively. The weighted-average remaining maturity of these instruments at December 31, 2023 and 2022 was approximately 5.5 years and 6.0 years, respectively. These interest-rate contracts were accounted for as fair value hedges. The company did not have any cash flow hedges relating to this program outstanding at December 31, 2023 and 2022. Forecasted Debt Issuance The company is exposed to interest rate volatility on future debt issuances. To manage this risk, the company may use instruments such as forward starting interest-rate swaps to lock in the rate on the interest payments related to the forecasted debt issuances. There were no instruments outstanding at December 31, 2023 and 2022. In connection with cash flow hedges of forecasted interest payments related to the company’s borrowings, the company recorded net losses (before taxes) of $121 million and $139 million at December 31, 2023 and 2022, respectively, in AOCI. The company estimates that $15 million of the deferred net losses (before taxes) on derivatives in AOCI at December 31, 2023 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 December 31, 2023 and 2022, the carrying value of debt designated as hedging instruments was $15.9 billion and $13.4 billion, respectively. The company also uses cross-currency swaps and foreign exchange forward contracts for this risk management purpose. At December 31, 2023 and 2022, the total notional amount of derivative instruments designated as net investment hedges was $4.9 billion and $4.7 billion, respectively. At both December 31, 2023 and 2022, the weighted-average remaining maturity of these instruments was approximately 0.1 years. Anticipated Royalties and Cost Transactions The company’s operations generate significant nonfunctional currency, third-party vendor payments and intercompany payments for royalties and goods and services among the company’s non-U.S. subsidiaries and with the company. In anticipation of these foreign currency cash flows and in view of the volatility of the currency markets, the company selectively employs foreign exchange forward contracts to manage its currency risk. These forward contracts are accounted for as cash flow hedges. At December 31, 2023, the maximum remaining length of time over which the company has hedged its exposure to the variability in future cash flows is approximately two years. At December 31, 2023 and 2022, the total notional amount of forward contracts designated as cash flow hedges of forecasted royalty and cost transactions was $9.2 billion and $8.1 billion, respectively. At both December 31, 2023 and 2022, the weighted-average remaining maturity of these instruments was approximately 0.6 years. At December 31, 2023 and 2022, in connection with cash flow hedges of anticipated royalties and cost transactions, the company recorded net gains (before taxes) of $40 million and $66 million, respectively, in AOCI. The company estimates that $20 million of deferred net losses (before taxes) on derivatives in AOCI at December 31, 2023 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. In August 2023, the company terminated all of its outstanding cross-currency swaps designated as cash flow hedges of the principal and interest associated with foreign currency denominated debt and executed forward contracts designated as cash flow hedges of the principal associated with foreign currency denominated debt. At December 31, 2023, the maximum length of time remaining over which the company has hedged its exposure was approximately seven years. At December 31, 2023 and 2022, the total notional amount of derivative instruments designated as cash flow hedges of foreign currency denominated debt was $5.2 billion and $3.1 billion, respectively. At December 31, 2023 and 2022, in connection with cross-currency swaps, the company recorded net losses (before taxes) of $68 million and $101 million, respectively, in AOCI, of which $23 million of deferred net losses (before taxes) is estimated to be reclassified to net income within the next 12 months. At December 31, 2023, in connection with forward contracts, the company has recorded net gains (before taxes) of $23 million in AOCI. Approximately $69 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. There was no activity associated with forward contracts recorded in AOCI at December 31, 2022. Subsidiary Cash and Foreign Currency Asset/Liability Management The company uses its Global Treasury Centers to manage the cash of its subsidiaries. These centers principally use currency swaps to convert cash flows in a cost-effective manner. In addition, the company uses foreign exchange forward contracts to economically hedge, on a net basis, the foreign currency exposure of a portion of the company’s nonfunctional currency assets and liabilities. The terms of these forward and swap contracts are generally less than one year. The changes in the fair values of these contracts and of the underlying hedged exposures are generally offsetting and are recorded in other (income) and expense in the Consolidated Income Statement. At December 31, 2023 and 2022, the total notional amount of derivative instruments in economic hedges of foreign currency exposure was $6.7 billion and $5.9 billion, respectively. Equity Risk Management The company is exposed to market price changes in certain broad market indices and in the company’s own stock primarily related to certain obligations to employees. Changes in the overall value of these employee compensation obligations are recorded in SG&A expense in the Consolidated Income Statement. Although not designated as accounting hedges, the company utilizes derivatives, including equity swaps and futures, to economically hedge the exposures related to its employee compensation obligations. The derivatives are linked to the total return on certain broad market indices or the total return on the company’s common stock, and are recorded at fair value with gains or losses also reported in SG&A expense in the Consolidated Income Statement. At December 31, 2023 and 2022, the total notional amount of derivative instruments in economic hedges of these compensation obligations was $1.2 billion and $1.1 billion, respectively. Cumulative Basis Adjustments for Fair Value Hedges At December 31, 2023 and 2022, the following amounts were recorded in the Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges: ($ in millions) At December 31: 2023 2022 Short-term debt Carrying amount of the hedged item $ (1) $ (199) Cumulative hedging adjustments included in the carrying amount—assets/(liabilities) (1) 1 L ong-term debt Carrying amount of the hedged item (6,629) (6,216) Cumulative hedging adjustments included in the carrying amount—assets/(liabilities) (1) 61 72 (1) Includes ($200) million and ($250) million of hedging adjustments on discontinued hedging relationships at December 31, 2023 and 2022, respectively. The Effect of Derivative Instruments in the Consolidated Income Statement The total amounts of income and expense line items presented in the Consolidated Income Statement in which the effects of fair value hedges, cash flow hedges, net investment hedges and derivatives not designated as hedging instruments are recorded and the total effect of hedge activity on these income and expense line items are as follows: ($ in millions) Total Gains/(Losses) of For the year ended December 31: 2023 2022 2021 2023 2022 2021 Cost of services $ 21,051 $ 21,062 $ 19,147 $ (5) $ 24 $ 43 Cost of sales 6,127 6,374 6,184 22 99 (16) Cost of financing 382 406 534 (11) 2 1 SG&A expense 19,003 18,609 18,745 165 (211) 176 Other (income) and expense (914) 5,803 873 17 (225) (205) Interest expense 1,607 1,216 1,155 (54) 6 3 ($ in millions) Gain/(Loss) Recognized in Consolidated Income Statement Consolidated Recognized on Attributable to Risk Being Hedged (2) For the year ended December 31: 2023 2022 2021 2023 2022 2021 Derivative instruments in fair value hedges (1) Interest rate contracts Cost of $ (17) $ (73) $ (1) $ (2) $ 85 $ 18 Interest (83) (257) (2) (11) 299 53 Derivative instruments not designated as hedging instruments Foreign exchange contracts Other (income) (192) (492) (48) N/A N/A N/A Equity contracts SG&A expense 153 (249) 201 N/A N/A N/A Other (income) — (83) — N/A N/A N/A Total $ (140) $ (1,153) $ 150 $ (13) $ 384 $ 71 ($ in millions) Gain/(Loss) Recognized in Consolidated Income Statement and Other Comprehensive Income For the year ended Recognized in OCI Consolidated Reclassified Amounts Excluded from Effectiveness Testing (3) December 31: 2023 2022 2021 2023 2022 2021 2023 2022 2021 Derivative instruments in cash flow hedges Interest rate contracts $ — $ — $ — Cost of financing $ (3) $ (4) $ (4) $ — $ — $ — Interest (15) (14) (13) — — — Foreign exchange contracts Cost of services (5) 24 43 — — — Amount included in the assessment of effectiveness 213 241 344 Cost of sales 22 99 (16) — — — Amount excluded from the assessment of effectiveness (6) — — Cost of financing (11) (21) (18) — — — SG&A expense 12 38 (24) — — — Other (income) and expense 239 349 (157) (29) — — Interest (51) (72) (52) — — — Instruments in net investment hedges (4) Foreign exchange contracts (397) 1,613 1,644 Cost of financing — — — 22 14 6 Interest — — — 105 50 17 Total $ (190) $ 1,854 $ 1,989 $ 189 $ 400 $ (243) $ 98 $ 64 $ 23 (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 in net income each period. (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 years ending December 31, 2023 and 2022, 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 busine |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION The following table presents total stock-based compensation cost included in income from continuing operations. ($ in millions) For the year ended December 31: 2023 2022 2021 Cost $ 190 $ 164 $ 145 SG&A expense 616 566 555 RD&E expense 328 258 218 Pre-tax stock-based compensation cost 1,133 987 919 Income tax benefits (290) (249) (223) Net stock-based compensation cost $ 843 $ 738 $ 695 The company’s total unrecognized compensation cost related to non-vested awards at December 31, 2023 was $1.7 billion and is expected to be recognized over a weighted-average period of approximately 2.5 years. Capitalized stock-based compensation cost was not material at December 31, 2023, 2022 and 2021. Incentive Awards Stock-based incentive awards are provided to employees under the terms of the company’s long-term performance plans (the Plans). The Plans are administered by the Executive Compensation and Management Resources Committee of the Board of Directors. Awards available under the Plans principally include restricted stock units, performance share units, stock options or any combination thereof. There were 293 million shares originally authorized to be awarded under the company's existing Plans and 66 million shares granted under previous plans that, if and when those awards were cancelled, could be reissued under the existing Plans. At December 31, 2023, 50 million unused shares were available to be granted. Stock Awards Stock awards for the periods presented were made in the form of Restricted Stock Units (RSUs), including Retention Restricted Stock Units (RRSUs), or Performance Share Units (PSUs). The following table summarizes RSU and PSU activity under the Plans during the years ended December 31, 2023, 2022 and 2021. RSUs PSUs Weighted-Average Number of Units Weighted-Average Number of Units (1) Balance at January 1, 2021 $ 117 16,896,704 $ 120 3,551,500 Awards granted 125 9,566,307 129 1,561,120 Awards released 120 (4,582,159) 129 (581,397) Awards canceled/forfeited/performance adjusted (2) 119 (2,072,800) 124 (453,178) Kyndryl separation - adjustment — 660,089 — 120,428 Kyndryl separation - cancellation 119 (1,429,661) 119 (469,616) Balance at December 31, 2021 $ 116 19,038,480 $ 118 3,728,857 Awards granted 112 11,447,966 110 1,237,019 Awards released 114 (7,013,530) 114 (679,601) Awards canceled/forfeited/performance adjusted (2) 116 (2,420,002) 116 (720,197) Balance at December 31, 2022 $ 115 21,052,914 $ 117 3,566,078 Awards granted 118 10,915,958 117 1,295,937 Awards released 114 (7,383,980) 113 (840,111) Awards canceled/forfeited/performance adjusted (2) 115 (1,527,249) 114 (548,865) Balance at December 31, 2023 $ 116 23,057,643 $ 118 3,473,039 (1) The balances at December 31 for each period presented represent the number of shares expected to be issued based on achievement of grant date performance targets. The actual number of shares issued will depend on final performance against specified targets over the vesting period. (2) Includes adjustments of (404,655), (362,247) and (223,397) for PSUs in 2023, 2022 and 2021, respectively, because final performance metrics were above or below specified targets. The total fair value of RSUs and PSUs granted and vested during the years ended December 31, 2023, 2022 and 2021 were as follows: ($ in millions) For the year ended December 31: 2023 2022 2021 RSUs Granted $ 1,293 $ 1,288 $ 1,195 Vested 845 801 549 PSUs Granted $ 151 $ 136 $ 201 Vested 95 77 75 In connection with vesting and release of RSUs and PSUs, the tax benefits realized by the company for the years ended December 31, 2023, 2022 and 2021 were $256 million, $249 million and $175 million, respectively. Stock Options Stock options are awards which allow the employee to purchase shares of the company’s stock at a fixed price. Stock options are granted at an exercise price equal to the company’s average high and low stock price on the date of grant. These awards generally vest in four equal increments on the first four anniversaries of the grant date and have a contractual term of 10 years. The company estimates the fair value of stock options at the date of grant using a Black-Scholes valuation model. Key inputs and assumptions used to estimate the fair value of stock options include the grant price of the award, the expected option term, volatility of the company’s stock, the risk-free rate and the company’s dividend yield. For the stock options granted for the years ended December 31, 2023 and 2022, the expected option term was determined from historical exercise patterns, volatility was based on an analysis of the company’s historical stock prices over the expected option term, the risk-free rate was obtained from the U.S. Treasury yield curve in effect at the time of grant and the dividend yield was based on the company’s expectation of paying dividends in the foreseeable future. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by employees who receive equity awards, and subsequent events are not indicative of the reasonableness of the original estimates of fair value made by the company. During the year ended December 31, 2021, the company did not grant stock options and no stock options were exercised, forfeited or cancelled. In 2023 and 2022, stock options were primarily granted by the company as part of its executive compensation programs. The weighted-average fair value of stock options granted for the years ended December 31, 2023 and 2022 was $22.75 and $14.29, respectively. The fair value was estimated based on the following weighted-average assumptions: For the year ended December 31: 2023 2022 Expected term (in years) 6.3 6.3 Expected volatility 26.0 % 25.5 % Risk-free rate 4.2 % 2.0 % Dividend yield 5.0 % 5.3 % The following table summarizes option activity under the Plans during the years ended December 31, 2023 and 2022. Weighted-Average Number of Shares Balance at January 1, 2022 $ 135 1,549,732 Options granted 125 5,044,353 Options exercised — — Options forfeited/cancelled/expired 125 (319,560) Balance at December 31, 2022 $ 128 6,274,525 Options granted 133 4,574,756 Options exercised 125 (408,045) Options forfeited/cancelled/expired 129 (584,674) Balance at December 31, 2023 $ 130 9,856,562 Vested and exercisable at December 31, 2023 $ 132 2,297,818 The weighted-average remaining contractual term and the aggregate intrinsic value of stock options outstanding was 7.8 years and $328 million, respectively, at December 31, 2023. The weighted-average remaining contractual term and the aggregate intrinsic value of stock options vested and exercisable was 4.6 years and $73 million, respectively, at December 31, 2023. Exercises of Stock Options The total intrinsic value of options exercised for the year ended December 31, 2023 was $10 million. No stock options were exercised for the years ended December 31, 2022 and 2021. The total cash received from employees as a result of stock option exercises for the year ended December 31, 2023 was approximately $51 million. In connection with these exercises, the tax benefits realized by the company for the year ended December 31, 2023 were immaterial. The company settles employee stock option exercises primarily with newly issued common shares and, occasionally, with treasury shares. Total treasury shares held at December 31, 2023 and 2022 were approximately 1,352 million and 1,351 million shares, respectively. Acquisitions In connection with various acquisition transactions, there were 0.4 million stock options outstanding at December 31, 2023, as a result of the company’s conversion of stock-based awards previously granted by acquired entities. The weighted-average exercise price of these stock options was $24 per share. No material stock awards were outstanding at December 31, 2023. IBM Employees Stock Purchase Plan Effective April 1, 2022, the company increased the discount for eligible participants to purchase shares of IBM common stock under its Employee Stock Purchase Plan (ESPP) from 5 percent to 15 percent off the average market price on the date of purchase. With this change, the ESPP is considered compensatory under the accounting requirements for stock-based compensation. The ESPP enables eligible participants to purchase shares of IBM common stock through payroll deductions of up to 10 percent of eligible compensation. Eligible compensation includes any compensation received by the employee during the year. The ESPP provides for semi-annual offering periods during which shares may be purchased and continues as long as shares remain available under the ESPP, unless terminated earlier at the discretion of the Board of Directors. Individual ESPP participants are restricted from purchasing more than $25,000 of common stock in one calendar year or 1,000 shares in an offering period. Employees purchased approximately 3.1 million, 2.4 million and 1.0 million shares under the ESPP during the years ended December 31, 2023, 2022 and 2021, respectively. For the years ended December 31, 2023 and 2022, the average market price of shares purchased was $117 and $114 per share, respectively, and the total stock-based compensation cost was $64 million and $43 million, respectively. Cash dividends declared and paid by the company on its common stock also include cash dividends on the company stock purchased through the ESPP. Dividends are paid on full and fractional shares and can be reinvested. The company stock purchased through the ESPP is considered outstanding and is included in the weighted-average outstanding shares for purposes of computing basic and diluted earnings per share. Approximately 11.3 million shares were available for purchase under the ESPP at December 31, 2023. |
Retirement-Related Benefits
Retirement-Related Benefits | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
Retirement-Related Benefits | RETIREMENT-RELATED BENEFITS Description of Plans IBM sponsors the following retirement-related plans/benefits: Plan Eligibility Funding Benefit Calculation Other U.S. Defined Benefit (DB) Pension Plans Qualified Personal Pension Plan (Qualified PPP) (1) U.S. regular, full-time and part-time employees hired prior to January 1, 2005 Company contributes to irrevocable trust fund, held for sole benefit of participants and beneficiaries Vary based on the participant: five Cash balance formula based on percentage of employees’ annual salary, as well as an interest crediting rate Benefit accruals ceased December 31, 2007 (1) . Certain defined benefit pension obligations and related plan assets were transferred in 2022, as described below Excess Personal Pension Plan (Excess PPP) Unfunded, provides benefits in excess of IRS limitations for qualified plans Supplemental Executive Retention Plan (Retention Plan) Eligible U.S. executives Unfunded Based on average earnings, years of service and age at termination of employment U.S. Defined Contribution (DC) Plans 401(k) Plus (1) U.S. regular, full-time and part-time employees All contributions are made in cash and invested in accordance with participants’ investment elections Dollar-for-dollar match, generally 5 or 6 percent of eligible compensation and automatic contribution of 1, 2 or 4 percent of eligible compensation, depending on date of hire Employees generally receive contributions after one year of service Excess 401(k) Plus (2) U.S. employees whose eligible compensation is expected to exceed IRS compensation limit for qualified plans Unfunded, non-qualified amounts deferred are record-keeping (notional) accounts and are not held in trust for the participants, but may be invested in accordance with participants’ investment elections (under the 401(k) Plus Plan options) Company match and automatic contributions (at the same rate under 401(k) Plus Plan) on eligible compensation deferred and on compensation earned in excess of the IRC pay limit. The percentage varies depending on eligibility and years of service Employees generally receive contributions after one year of service. Amounts deferred into the Plan, including company contributions, are recorded as liabilities U.S. Nonpension Postretirement Benefit Plan Nonpension Postretirement Plan Medical and dental benefits for eligible U.S. retirees and eligible dependents, as well as life insurance for eligible U.S. retirees Company contributes to irrevocable trust fund, held for the sole benefit of participants and beneficiaries Varies based on plan design formulas and eligibility requirements Since January 1, 2004, new hires are not eligible for these benefits Non-U.S. Plans DB or DC Eligible regular employees in certain non-U.S. subsidiaries or branches Company deposits funds under various fiduciary-type arrangements, purchases annuities under group contracts or provides reserves for these plans Based either on years of service and the employee’s compensation (generally during a fixed number of years immediately before retirement) or on annual credits In certain countries, benefit accruals have ceased and/or have been closed to new hires as of various dates Nonpension Postretirement Plan Medical and dental benefits for eligible non-U.S. retirees and eligible dependents, as well as life insurance for certain eligible non-U.S. retirees Primarily unfunded except for a few select countries where the company contributes to irrevocable trust funds held for the sole benefit of participants and beneficiaries Varies based on plan design formulas and eligibility requirements by country Most non-U.S. retirees are covered by local government sponsored and administered programs (1) Beginning January 1, 2024, the company changed how it will provide retirement benefits to certain U.S. eligible employees. Refer to IBM U.S. Retirement Plan Changes section below for additional information. (2) Beginning January 1, 2024, the company's match contribution on eligible compensation deferred and earned will be 5 percent for all eligible employees . Plan Financial Information Summary of Financial Information The following table presents a summary of the total retirement-related benefits net periodic (income)/cost recorded in the Consolidated Income Statement. ($ in millions) U.S. Plans Non-U.S. Plans Total For the year ended December 31: 2023 2022 2021 2023 2022 2021 2023 2022 2021 Total defined benefit pension plans (income)/cost (1) $ (329) $ 5,857 $ 319 $ 359 $ 836 $ 1,119 $ 30 $ 6,693 $ 1,438 Total defined contribution plans cost $ 615 $ 555 $ 582 $ 376 $ 369 $ 409 $ 991 $ 924 $ 992 Nonpension postretirement benefit plans cost $ 92 $ 85 $ 127 $ 36 $ 30 $ 44 $ 128 $ 115 $ 172 Total retirement-related benefits net periodic cost (1) $ 378 $ 6,497 $ 1,029 $ 771 $ 1,235 $ 1,573 $ 1,149 $ 7,732 $ 2,601 (1) 2022 includes the impact of a one-time, non-cash, pre-tax pension settlement charge of $5.9 billion related to the Qualified PPP, as described below. The following table presents a summary of the total PBO for defined benefit pension plans, APBO for nonpension postretirement benefit plans, fair value of plan assets and the associated funded status recorded in the Consolidated Balance Sheet. ($ in millions) Benefit Obligations Fair Value of Plan Assets Funded Status (1) At December 31: 2023 2022 2023 2022 2023 2022 U.S. Plans Overfunded plans Qualified PPP $ 19,854 $ 20,091 $ 24,437 $ 25,094 $ 4,584 $ 5,002 Underfunded plans Nonqualified defined benefit pension plans (2) 1,382 1,402 — — (1,382) (1,402) Nonpension postretirement benefit plan 2,233 2,369 10 10 (2,224) (2,359) Total underfunded U.S. plans $ 3,615 $ 3,771 $ 10 $ 10 $ (3,605) $ (3,761) Non-U.S. Plans Overfunded plans Qualified defined benefit pension plans (3) $ 16,515 $ 15,443 $ 19,438 $ 18,677 $ 2,923 $ 3,234 Nonpension postretirement benefit plans — 7 — 7 — 0 Total overfunded non-U.S. plans $ 16,515 $ 15,450 $ 19,438 $ 18,684 $ 2,923 $ 3,234 Underfunded plans Qualified defined benefit pension plans (3) $ 11,946 $ 11,361 $ 9,621 $ 9,694 $ (2,325) $ (1,667) Nonqualified defined benefit pension plans (3) 5,018 4,457 — — (5,018) (4,457) Nonpension postretirement benefit plans 586 524 23 22 (564) (502) Total underfunded non-U.S. plans $ 17,550 $ 16,342 $ 9,643 $ 9,716 $ (7,907) $ (6,626) Total overfunded plans $ 36,369 $ 35,541 $ 43,875 $ 43,778 $ 7,506 $ 8,236 Total underfunded plans $ 21,165 $ 20,113 $ 9,653 $ 9,726 $ (11,512) $ (10,387) (1) Funded status is recognized in the Consolidated Balance Sheet as follows: Asset amounts as prepaid pension assets; (Liability) amounts as compensation and benefits (current liability) and retirement and nonpension postretirement benefit obligations (noncurrent liability). (2) Excess PPP and Retention Plan. (3) Non-U.S. qualified plans represent plans funded outside of the U.S. Non-U.S. nonqualified plans are unfunded. At December 31, 2023, the company’s qualified defined benefit pension plans worldwide were 111 percent funded compared to the benefit obligations, with the U.S. Qualified PPP 123 percent funded. Overall, including nonqualified plans, the company’s defined benefit pension plans worldwide were 98 percent funded. Defined Benefit Pension and Nonpension Postretirement Benefit Plan Financial Information The following tables through page 112 The following tables present the components of net periodic (income)/cost of the retirement-related benefit plans recognized in the Consolidated Income Statement, excluding defined contribution plans. ($ in millions) Defined Benefit Pension Plans U.S. Plans Non-U.S. Plans For the year ended December 31: 2023 2022 2021 2023 2022 2021 Service cost $ — $ — $ — $ 177 $ 237 $ 300 Interest cost (1) 1,090 1,129 1,109 1,170 493 424 Expected return on plan assets (1) (1,529) (1,729) (1,802) (1,440) (1,016) (1,115) Amortization of prior service costs/(credits) (1) 0 8 16 20 14 (12) Recognized actuarial losses (1) 109 527 996 400 1,031 1,392 Curtailments and settlements (1) (2) — 5,923 — 7 47 94 Multi-employer plans — — — 13 15 17 Other costs/(credits) (1) — — — 13 15 18 Total net periodic (income)/cost (2) $ (329) $ 5,857 $ 319 $ 359 $ 836 $ 1,119 ($ in millions) Nonpension Postretirement Benefit Plans U.S. Plan Non-U.S. Plans For the year ended December 31: 2023 2022 2021 2023 2022 2021 Service cost $ 4 $ 5 $ 7 $ 2 $ 3 $ 4 Interest cost (1) 117 85 65 39 24 27 Expected return on plan assets (1) — — — (2) (2) (3) Amortization of prior service costs/(credits) (1) (29) (10) 4 0 0 0 Recognized actuarial losses (1) — 5 52 (1) 4 15 Curtailments and settlements (1) — — — (2) 0 0 Other costs/(credits) (1) — — — 0 0 0 Total net periodic cost $ 92 $ 85 $ 127 $ 36 $ 30 $ 44 (1) These components of net periodic pension costs are included in other (income) and expense in the Consolidated Income Statement. (2) 2022 includes the impact of a one-time, non-cash, pre-tax pension settlement charge of $5.9 billion related to the Qualified PPP, as described below. IBM U.S. Retirement Plan Changes Over the past several years, the company has taken actions to reduce the risk profile of its worldwide retirement-related plans, while at the same time increasing the funded status of the plans. As described in note A, “Significant Accounting Policies,” in September 2022, the Qualified PPP irrevocably transferred to the Insurers approximately $16 billion of the Qualified PPP’s defined benefit pension obligations and related plan assets, thereby reducing the company’s pension obligations and assets by the same amount. This transaction further de-risked the company’s retirement-related plans by eliminating the potential for the company to make future cash contributions to fund this portion of pension obligations that was transferred to the Insurers. Upon issuance of the group annuity contracts, the Qualified PPP’s benefit obligations and administration for approximately 100,000 of the company’s retirees and beneficiaries (the Transferred Participants) were transferred to the Insurers. Under the group annuity contracts, each Insurer has made an irrevocable commitment, and is solely responsible, to pay 50 percent of the pension benefits of each Transferred Participant due on and after January 1, 2023. The transaction resulted in no changes to the benefits to be received by the Transferred Participants. The company recognized a one-time, non-cash, pretax pension settlement charge of $5.9 billion ($4.4 billion net of tax) in the third quarter of 2022 primarily related to the accelerated recognition of actuarial losses included within AOCI in the Consolidated Statement of Equity. In September 2022, the company amended its U.S. Nonpension Postretirement Plan to transition coverage for Medicare-eligible participants to a new IBM-sponsored group Medicare Advantage program administered by UnitedHealthcare, as of January 1, 2023. The changes were intended to provide an enhanced member experience, better value and more comprehensive benefits to IBM participants. This change resulted in a decrease in nonpension postretirement benefit obligations and a corresponding decrease in AOCI in 2022. Effective January 1, 2024, IBM changed how it provides certain retirement-related benefits in the U.S. IBM is providing a new benefit to most U.S. employees under its existing U.S. Qualified PPP called the Retirement Benefit Account (RBA). This is in place of any IBM contributions to the U.S. employees’ 401(k) Plus accounts. IBM U.S. regular full-time and part-time employees with at least one year of service will participate in the RBA. Each eligible employee's RBA will be credited monthly with an amount equal to five percent of their eligible pay with no employee contribution required. Under the RBA, eligible employees will earn six percent interest through 2026 and starting in 2027, will earn interest equal to the 10-year U.S. Treasury Yield, subject to a three percent minimum per year through 2033. Eligible employees also received a salary increase effective January 1, 2024 for the difference between the IBM 401(k) Plus contribution percent they were previously entitled to receive and the five percent RBA pay credit. Since the RBA is a component of the Qualified PPP, it will be funded by the trust for the Qualified PPP along with all other benefits in the Qualified PPP. At December 31, 2023, the Qualified PPP was 123 percent funded with assets exceeding liabilities by $4.6 billion. As a result of this change, inactive pension plan participants no longer represent substantially all of the participants in the U.S. Qualified PPP. As required by U.S. GAAP, this will change 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. This will result in an increase to 2024 amortization expense of approximately $0.3 billion. There will be no impact to funded status, retiree benefit payments or funding requirements of the U.S. Qualified PPP due to the change in amortization period. The following table presents the changes in benefit obligations and plan assets of the company’s retirement-related benefit plans, excluding DC plans. ($ in millions) Defined Benefit Pension Plans Nonpension Postretirement Benefit Plans U.S. Plans Non-U.S. Plans U.S. Plan Non-U.S. Plans 2023 2022 2023 2022 2023 2022 2023 2022 Change in benefit obligation Benefit obligation at January 1 $ 21,493 $ 48,182 $ 31,261 $ 45,097 $ 2,369 $ 3,404 $ 531 $ 638 Service cost — — 177 237 4 5 2 3 Interest cost 1,090 1,129 1,170 493 117 85 39 24 Plan participants' contributions — — 17 14 38 43 — — Acquisitions/divestitures, net — — (20) (45) — — — — Actuarial losses/(gains) 486 (7,849) 2,077 (8,819) (19) (780) 35 (87) Benefits paid from trust (1,424) (3,133) (1,629) (1,572) (274) (385) (7) (6) Direct benefit payments (122) (123) (396) (418) (3) (2) (31) (32) Foreign exchange impact — — 1,021 (3,463) — — 22 (10) Amendments/curtailments/ settlements/other (1) (288) (16,712) (198) (262) — 0 (4) (1) Benefit obligation at December 31 $ 21,235 $ 21,493 $ 33,479 $ 31,261 $ 2,233 $ 2,369 $ 586 $ 531 Change in plan assets Fair value of plan assets at January 1 $ 25,094 $ 51,852 $ 28,371 $ 39,979 $ 10 $ 8 $ 29 $ 31 Actual return on plan assets 1,055 (6,914) 1,391 (6,737) — — 3 3 Employer contributions — — 57 103 233 344 — — Acquisitions/divestitures, net — — (24) (20) — — — — Plan participants' contributions — — 17 14 38 43 — — Benefits paid from trust (1,424) (3,133) (1,629) (1,572) (274) (385) (7) (6) Foreign exchange impact — — 1,058 (3,154) — — 3 2 Amendments/curtailments/ settlements/other (1) (288) (16,712) (181) (243) 2 0 (6) 0 Fair value of plan assets at December 31 $ 24,437 $ 25,094 $ 29,059 $ 28,371 $ 10 $ 10 $ 23 $ 29 Funded status at December 31 $ 3,202 $ 3,600 $ (4,420) $ (2,891) $ (2,224) $ (2,359) $ (564) $ (501) Accumulated benefit obligation (2) $ 21,235 $ 21,493 $ 33,128 $ 30,961 N/A N/A N/A N/A (1) 2022 amount related to U.S. Defined Benefit Pension Plans primarily represents the transfer of Qualified PPP pension obligations and related plan assets to the Insurers pursuant to group annuity contracts. (2) Represents the benefit obligation assuming no future participant compensation increases. N/A–Not applicable The following table presents the net funded status recognized in the Consolidated Balance Sheet. ($ in millions) Defined Benefit Pension Plans Nonpension Postretirement Benefit Plans U.S. Plans Non-U.S. Plans U.S. Plan Non-U.S. Plans At December 31: 2023 2022 2023 2022 2023 2022 2023 2022 Prepaid pension assets $ 4,584 $ 5,002 $ 2,923 $ 3,234 $ 0 $ 0 $ 0 $ 0 Current liabilities—compensation and benefits (119) (121) (366) (347) (202) (307) (17) (16) Noncurrent liabilities—retirement and nonpension postretirement benefit obligations (1,262) (1,281) (6,977) (5,777) (2,022) (2,052) (547) (486) Funded status—net $ 3,202 $ 3,600 $ (4,420) $ (2,891) $ (2,224) $ (2,359) $ (564) $ (501) The following table presents the pre-tax net loss, prior service costs/(credits) and transition (assets)/liabilities recognized in OCI and the changes in the pre-tax net loss, prior service costs/(credits) and transition (assets)/liabilities recognized in AOCI for the retirement-related benefit plans. ($ in millions) Defined Benefit Pension Plans Nonpension Postretirement Benefit Plans U.S. Plans Non-U.S. Plans U.S. Plan Non-U.S. Plans 2023 2022 2023 2022 2023 2022 2023 2022 Net loss at January 1 $ 8,617 $ 14,273 $ 11,219 $ 13,412 $ 94 $ 464 $ 86 $ 183 Current period loss/(gain) 959 794 2,125 (1,115) (20) (365) 34 (93) Curtailments and settlements (1) — (5,923) (7) (47) — — 2 0 Amortization of net loss included in net periodic (income)/cost (109) (527) (400) (1,031) — (5) 1 (4) Net loss at December 31 $ 9,467 $ 8,617 $ 12,937 $ 11,219 $ 73 $ 94 $ 123 $ 86 Prior service costs/(credits) at January 1 $ 0 $ 8 $ 330 $ 397 $ (379) $ 26 $ 0 $ (4) Current period prior service costs/(credits) — — (1) (53) — (415) (1) 5 Curtailments, settlements and other — — — — — — — — Amortization of prior service (costs)/credits included in net periodic (income)/cost 0 (8) (20) (14) 29 10 0 0 Prior service costs/(credits) at December 31 $ 0 $ 0 $ 309 $ 330 $ (350) $ (379) $ (1) $ 0 Transition (assets)/liabilities at January 1 $ — $ — $ 0 $ 0 $ — $ — $ 0 $ 0 Transition (assets)/liabilities at December 31 $ — $ — $ 0 $ 0 $ — $ — $ 0 $ 0 Total loss recognized in accumulated other comprehensive income/(loss) (2) $ 9,467 $ 8,617 $ 13,245 $ 11,549 $ (276) $ (285) $ 122 $ 86 (1) 2022 amount related to U.S. Defined Benefit Pension Plans includes the impact of a one-time, non-cash, pre-tax pension settlement charge of $5.9 billion related to the Qualified PPP, as described above. (2) Refer to note S, “Equity Activity,” for the total change in AOCI, and the Consolidated Statement of Comprehensive Income for the components of net periodic (income)/cost, including the related tax effects, recognized in OCI for the retirement-related benefit plans. Assumptions Used to Determine Plan Financial Information Underlying both the measurement of benefit obligations and net periodic (income)/cost are actuarial valuations. These valuations use participant-specific information such as salary, age and years of service, as well as certain assumptions, the most significant of which include estimates of discount rates, expected return on plan assets, rate of compensation increases, interest crediting rates and mortality rates. The company evaluates these assumptions, at a minimum, annually, and makes changes as necessary. The following tables present the assumptions used to measure the net periodic (income)/cost and the year-end benefit obligations for retirement-related benefit plans. Defined Benefit Pension Plans U.S. Plans Non-U.S. Plans 2023 2022 2021 2023 2022 2021 Weighted-average assumptions used to measure net periodic (income)/cost for the year ended December 31 Discount rate (1) 5.30 % 3.30 % 2.20 % 3.80 % 1.26 % 0.87 % Expected long-term returns on plan assets (1) 5.50 % 4.33 % 3.75 % 4.44 % 2.97 % 2.85 % Rate of compensation increase N/A N/A N/A 4.00 % 3.02 % 2.59 % Interest crediting rate (1) 4.40 % 2.07 % 1.10 % 0.34 % 0.26 % 0.26 % Weighted-average assumptions used to measure benefit obligations at December 31 Discount rate 5.00 % 5.30 % 2.60 % 3.36 % 3.80 % 1.26 % Rate of compensation increase 5.00 % N/A N/A 4.18 % 4.00 % 3.02 % Interest crediting rate 3.80 % 4.40 % 1.10 % 0.28 % 0.34 % 0.26 % (1) The U.S. Plans Qualified PPP discount rate, expected long-term return on plan assets and interest crediting rate of 2.60 percent, 4.00 percent and 1.10 percent, respectively, for the period January 1, 2022 through August 31, 2022, changed to 4.70 percent, 5.00 percent and 4.00 percent, respectively, for the period September 1, 2022 through December 31, 2022 due to remeasurement of the plan as a result of the changes described on page 109 N/A–Not applicable Nonpension Postretirement Benefit Plans U.S. Plan Non-U.S. Plans 2023 2022 2021 2023 2022 2021 Weighted-average assumptions used to measure net periodic cost for the year ended December 31 Discount rate (1) 5.30 % 3.05 % 1.80 % 7.25 % 5.35 % 4.55 % Expected long-term returns on plan assets N/A N/A N/A 8.05 % 6.64 % 6.62 % Interest crediting rate (1) 4.40 % 2.16 % 1.10 % N/A N/A N/A Weighted-average assumptions used to measure benefit obligations at December 31 Discount rate 5.00 % 5.30 % 2.30 % 7.66 % 7.25 % 5.35 % Interest crediting rate 3.80 % 4.40 % 1.10 % N/A N/A N/A (1) The U.S. Nonpension Postretirement Plan discount rate and interest crediting rate of 2.30 percent and 1.10 percent, respectively, for the period January 1, 2022 through July 31, 2022, changed to 4.10 percent and 3.65 percent, respectively, for the period August 1, 2022 through December 31, 2022 due to remeasurement of the plan as a result of the changes described on page 109 N/A–Not applicable Item Description of Assumptions Discount Rate Changes in discount rate assumptions impact net periodic (income)/cost and the PBO. For the U.S. and certain non-U.S. countries, a portfolio of high-quality corporate bonds is used to construct a yield curve. Cash flows from the company’s expected benefit obligation payments are matched to the yield curve to derive the discount rates. In other non-U.S. countries where the markets for high-quality long-term bonds are not as well developed, a portfolio of long-term government bonds is used as a base, and a credit spread is added to simulate corporate bond yields at these maturities in the jurisdiction of each plan. This is the benchmark for developing the respective discount rates. Expected Long-Term Returns on Plan Assets Represents the expected long-term returns on plan assets based on the calculated market-related value of plan assets and considers long-term expectations for future returns and the investment policies and strategies discussed on pages 114 115 The use of expected returns may result in pension income that is greater or less than the actual return of those plan assets in a given year. Over time, however, the expected long-term returns are designed to approximate the actual long-term returns, and therefore result in a pattern of income or loss recognition that more closely matches the pattern of the services provided by the employees. The difference between actual and expected returns is recognized as a component of net loss or gain in AOCI, which is amortized as a component of net periodic (income)/cost over the service lives or life expectancy of the plan participants, depending on the plan, provided such amounts exceed certain thresholds provided by accounting standards. The market-related value of plan assets recognizes changes in the fair value of plan assets systematically over a five The projected long-term rate of return on plan assets for 2024 is 5.00 percent for U.S. and 4.90 percent for non-U.S. DB Plans. Rate of Compensation Increases and Mortality Assumptions Compensation rate increases are determined based on the company’s long-term plans for such increases. Mortality assumptions are based on life expectancy and death rates for different types of participants and are periodically updated based on actual experience. Interest Crediting Rate Benefits for participants in Cash Balance Plans are calculated using a cash balance formula. An assumption underlying this formula is an interest crediting rate, which impacts both net periodic (income)/cost and the PBO. This provides the basis for projecting the expected interest rate that plan participants will earn on the benefits that they are expected to receive in the following year. Healthcare Cost Trend Rate For nonpension postretirement benefit plans, the company determines healthcare cost trend rates based on medical cost inflation expectations in each market and IBM’s plan characteristics. The healthcare cost trend rate is an important consideration when setting future expectations for plan costs or benefit obligations, taking into account the terms of the plan which limit the company’s future obligations to the participants. The company’s U.S. healthcare cost trend rate assumption for 2024 is 6.69 percent and is expected to decrease to 4.50 percent over approximately 14 years. Plan Assets Retirement-related benefit plan assets are recognized and measured at fair value. Because of the inherent uncertainty of valuations, these fair value measurements may not necessarily reflect the amounts the company could realize in current market transactions. Investment Policies and Strategies The investment objectives of the Qualified PPP portfolio are designed to generate returns that will enable the plan to meet its future obligations. The precise amount for which these obligations will be settled depends on future events, including the retirement dates and life expectancy of the plan participants. The obligations are estimated using actuarial assumptions, based on the current economic environment and other pertinent factors described above. The Qualified PPP portfolio’s investment strategy balances the requirement to generate returns, using assets with higher expected returns such as equity securities, with the need to control risk in the portfolio with less volatile assets, such as fixed-income securities. Risks include, among others, inflation, volatility in equity values and changes in interest rates that could cause the plan to become underfunded, thereby increasing its dependence on contributions from the company. To mitigate any potential concentration risk, careful consideration is given to balancing the portfolio among industry sectors, companies and geographies, taking into account interest rate sensitivity, dependence on economic growth, currency and other factors that affect investment returns. There were no significant changes to investment strategy made in 2023 and none are planned for 2024. The Qualified PPP portfolio’s target allocation is 8 percent equity securities, 83 percent fixed-income securities, 3 percent real estate and 6 percent other investments. The assets are managed by professional investment firms and investment professionals who are employees of the company. They are bound by investment mandates determined by the company’s management and are measured against specific benchmarks. Among these managers, consideration is given, but not limited to, balancing security concentration, issuer concentration, investment style and reliance on particular active and passive investment strategies. Market liquidity risks are tightly controlled, with $1,717 million of the Qualified PPP portfolio as of December 31, 2023 invested in private market assets consisting of private equities and private real estate investments, which are less liquid than publicly traded securities. In addition, the Qualified PPP portfolio had $866 million in commitments for future investments in private markets to be made over a number of years. These commitments are expected to be funded from plan assets. Derivatives are used as an effective means to achieve investment objectives and/or as a component of the plan’s risk management strategy. The primary reasons for the use of derivatives are fixed income management, including duration, interest rate management and credit exposure, cash equitization and to manage currency strategies. Outside the U.S., the investment objectives are similar to those described previously, subject to local regulations. The weighted-average target allocation for the non-U.S. plans is 16 percent equity securities, 63 percent fixed-income securities, 3 percent real estate, 13 percent insurance contracts and 5 percent other investments, which is consistent with the allocation decisions made by the company’s management. In some countries, a higher percentage allocation to fixed income is required to manage solvency and funding risks. In others, the responsibility for managing the investments typically lies with a board that may include up to 50 percent of members elected by employees and retirees. This can result in slight differences compared with the strategies previously described. The percentage of non-U.S. plans investment in assets that are less liquid is consistent with the U.S. plan. The use of derivatives is also consistent with the U.S. plan and mainly for currency hedging, interest rate risk management, credit exposure and alternative investment strategies. The company’s nonpension postretirement benefit plans are underfunded or unfunded. For some plans, the company maintains a nominal, highly liquid trust fund balance to ensure timely benefit payments. Defined Benefit Pension Plan Assets The following table presents the company’s defined benefit pension plans’ asset classes and their associated fair value at December 31, 2023. The U.S. Plan consists of the Qualified PPP and the non-U.S. Plans consist of all plans sponsored by the company’s subsidiaries. ($ in millions) U.S. Plan Non-U.S. Plans Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Equity Equity securities (1) $ 631 $ — $ — $ 631 $ 243 $ — $ — $ 243 Equity mutual funds (2) 155 — — 155 5 — — 5 Fixed income Government and related (3) — 9,861 — 9,861 — 7,700 — 7,700 Corporate bonds (4) — 7,074 709 7,783 — 2,691 — 2,691 Mortgage and asset-backed securities — 178 — 178 — 9 — 9 Fixed income mutual funds (5) 251 — — 251 — — 75 75 Insurance contracts (6) — — — — — 3,774 — 3,774 Cash and short-term investments (7) 495 119 — 614 264 315 — 579 Private equity — — 13 13 — — — — Real estate — — — — — — 4 4 Derivatives (8) — — — — 51 258 — 309 Other mutual funds (9) — — — — 20 — — 20 Subtotal 1,532 17,231 722 19,485 584 14,747 78 15,409 Investments measured at net asset value using the NAV practical expedient (10) — — — 4,952 — — — 13,709 Other (11) — — — 0 — — — (59) Fair value of plan assets $ 1,532 $ 17,231 $ 722 $ 24,437 $ 584 $ 14,747 $ 78 $ 29,059 (1) Represents U.S. and international securities. The U.S. Plan includes IBM common stock of $1 million. Non-U.S. Plans include IBM common stock of $2 million. (2) Invests in predominantly equity securities. (3) Includes debt issued by national, state and local governments and agencies. (4) The U.S. Plans include IBM corporate bonds of $16 million. Non-U.S. Plans include IBM corporate bonds of $5 million. (5) Invests predominantly in fixed-income securities. (6) Primarily represents insurance policy contracts (Buy-In) in certain non-U.S. plans. (7) Includes cash, cash equivalents and short-term marketable securities. (8) Includes interest-rate derivatives, forwards, exchange-traded and other over-the-counter derivatives. (9) Invests in both equity and fixed-income securities. (10) Investments measured at fair value using the net asset value (NAV) per share (or its equivalent) as a practical expedient, including commingled funds, hedge funds, private equity and real estate partnerships. (11) Represents net unsettled transactions, relating primarily to purchases and sales of plan assets. The U.S. nonpension postretirement benefit plan assets of $10 million were invested primarily in cash equivalents, categorized as Level 1 in the fair value hierarchy. The non-U.S. nonpension postretirement benefit plan assets of $23 million, primarily in Brazil, and, to a lesser extent, in Mexico and South Africa, were invested primarily in government and related fixed-income securities and corporate bonds, categorized as Level 2 in the fair value hierarchy. The following table presents the company’s defined benefit pension plans’ asset classes and their associated fair value at December 31, 2022. The U.S. Plan consists of the Qualified PPP and the non-U.S. Plans consist of all plans sponsored by the company’s subsidiaries. ($ in millions) U.S. Plan Non-U.S. Plans Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Equity Equity securities (1) $ 518 $ — $ — $ 518 $ 247 $ — $ — $ 247 Equity mutual funds (2) 114 — — 114 0 — — 0 Fixed income Government and related (3) — 9,074 — 9,074 — 6,837 — 6,837 Corporate bonds (4) — 6,885 721 7,606 — 2,546 — 2,546 Mortgage and asset-backed securities — 238 — 238 — 2 — 2 Fixed income mutual funds (5) 234 — — 234 — — 9 9 Insurance contracts (6) — — — — — 3,654 — 3,654 Cash and short-term investments (7) 72 570 — 643 286 263 — 549 Private equity — — 421 421 — — — — Real estate — 8 — 8 — — 145 145 Derivatives (8) — — — — 32 262 — 294 Other mutual funds (9) — — — — 25 — — 25 Subtotal 937 16,776 1,142 18,855 590 13,563 155 14,308 Investments measured at net asset value using the NAV practical expedient (10) — — — 6,242 14,141 Other (11) — — — (4) — — — (78) Fair value |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS On January 30, 2024, the company announced that the Board of Directors approved a quarterly dividend of $1.66 per common share. The dividend is payable March 9, 2024 to stockholders of record on February 9, 2024. On February 5, 2024, IBM International Capital Pte. Ltd, a wholly owned finance subsidiary of the company, issued $5.5 billion of U.S. dollar fixed rate 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. |
SCHEDULE II VALUATION AND QUALI
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS AND RESERVES | 12 Months Ended |
Dec. 31, 2023 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS AND RESERVES | SCHEDULE II INTERNATIONAL BUSINESS MACHINES CORPORATION AND SUBSIDIARY COMPANIES VALUATION AND QUALIFYING ACCOUNTS AND RESERVES For the Years Ended December 31: (Dollars in Millions) Description Balance at Additions/ Write-offs Foreign Balance at Allowance For Credit Losses 2023 –Current (1) $ 467 $ 13 $ (97) $ 48 $ 431 –Noncurrent $ 28 $ (2) $ — $ 0 $ 27 2022 –Current (1) $ 418 $ 59 $ (55) $ 45 $ 467 –Noncurrent $ 25 $ 6 $ 0 $ (2) $ 28 2021 –Current $ 503 $ (35) $ (46) $ (4) $ 418 –Noncurrent $ 47 $ (21) $ 0 $ (2) $ 25 Allowance For Inventory Losses 2023 $ 631 $ 201 $ (183) $ 9 $ 658 2022 $ 633 $ 162 $ (148) $ (15) $ 631 2021 $ 514 $ 240 $ (118) $ (3) $ 633 Revenue Based Provisions 2023 $ 424 $ 500 $ (456) $ 12 $ 480 2022 $ 435 $ 620 $ (629) $ (2) $ 424 2021 $ 372 $ 627 $ (574) $ 10 $ 435 (1) Other includes reserves related to discontinued operations. Additions/(Deductions) to the allowances represent changes in estimates of unrecoverable amounts in receivables and inventory and are recorded to expense and cost accounts, respectively. Amounts are written-off when they are deemed unrecoverable by the company. Additions/(Deductions) to Revenue Based Provisions represent changes in estimated reductions to revenue, primarily as a result of revenue-related programs, including customer and business partner rebates. Write-offs for Revenue Based Provisions represent reductions in the provision due to amounts remitted to customers and business partners. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [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). 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-year amounts have been reclassified to conform to the change in current year presentation. This is annotated where applicable. On November 3, 2021 we completed the separation of our managed infrastructure services unit into a new public company, Kyndryl. The accounting requirements for reporting the separation of Kyndryl as a discontinued operation were met when the separation was completed. Accordingly, the historical results of Kyndryl are presented as discontinued operations and, as such, have been excluded from continuing operations and segment results for all periods presented. Refer to note E, “Acquisitions & Divestitures,” for additional information. In September 2022, the IBM Qualified Personal Pension Plan (Qualified PPP) purchased two separate nonparticipating single premium group annuity contracts from The Prudential Insurance Company of America and Metropolitan Life Insurance Company (collectively, the Insurers) and irrevocably transferred to the Insurers approximately $16 billion of the Qualified PPP’s defined benefit pension obligations and related plan assets, thereby reducing the company’s pension obligations and assets by the same amount. The group annuity contracts were purchased using assets of the Qualified PPP and no additional funding contribution was required from the company. As a result of this transaction the company recognized a one-time, non-cash, pre-tax pension settlement charge of $5.9 billion ($4.4 billion net of tax) in the third quarter of 2022, primarily related to the accelerated recognition of accumulated actuarial losses of the Qualified PPP. The $1.5 billion tax effect associated with the settlement charge is reflected as an adjustment to reconcile net income to net cash provided by operating activities within deferred taxes in the Consolidated Statement of Cash Flows for the year ended December 31, 2022. Refer to note V, “Retirement-Related Benefits,” for additional information. In the fourth quarter of 2022, the company completed its annual assessment of the useful lives of its information technology equipment. Due to advances in technology, the company determined it should increase the estimated useful lives of its server and network equipment from five three The company reported a provision for income taxes of $1,176 million for the year ended December 31, 2023. The company reported a benefit from income taxes of $626 million for the year ended December 31, 2022. This tax benefit was primarily due to the transfer of a portion of the Qualified PPP’s defined benefit pension obligations and related plan assets, as described above. Refer to note H, “Taxes,” for additional information. Noncontrolling interest amounts of $16 million, $20 million and $19 million, net of tax, for the years ended December 31, 2023, 2022 and 2021, respectively, are included as a reduction within other (income) and expense in the Consolidated Income Statement. |
Principles of Consolidation | Principles of Consolidation |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts that are reported in the Consolidated Financial Statements and accompanying disclosures. Estimates are made for the following, among others: revenue, costs to complete service contracts, income taxes, pension assumptions, valuation of assets including goodwill and intangible assets, loss contingencies, allowance for credit losses and other matters. 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. Actual results may be different from these estimates. |
Revenue | Revenue The company accounts for a contract with a client when it has written approval, the contract is committed, the rights of the parties, including payment terms, are identified, the contract has commercial substance and consideration is probable of collection. Revenue is recognized when, or as, control of a promised product or service transfers to a client, in an amount that reflects the consideration to which the company expects to be entitled in exchange for transferring those products or services. If the consideration promised in a contract includes a variable amount, the company estimates the amount to which it expects to be entitled using either the expected value or most likely amount method. The company’s contracts may include terms that could cause variability in the transaction price, including, for example, rebates, volume discounts, service-level penalties, and performance bonuses or other forms of contingent revenue. The company only includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The company may not be able to reliably estimate contingent revenue in certain long-term arrangements due to uncertainties that are not expected to be resolved for a long period of time or when the company’s experience with similar types of contracts is limited. The company’s arrangements infrequently include contingent revenue. Changes in estimates of variable consideration are included in note C, “Revenue Recognition.” The company’s standard billing terms are that payment is due upon receipt of invoice, payable within 30 days. Invoices are generally issued as control transfers and/or as services are rendered. Additionally, in determining the transaction price, the company adjusts the promised amount of consideration for the effects of the time value of money if the billing terms are not standard and the timing of payments agreed to by the parties to the contract provide the client or the company with a significant benefit of financing, in which case the contract contains a significant financing component. As a practical expedient, the company does not account for significant financing components if the period between when the company transfers the promised product or service to the client and when the client pays for that product or service will be one year or less. Most arrangements that contain a financing component are financed through the company’s Financing business and include explicit financing terms. The company may include subcontractor services or third-party vendor equipment or software in certain integrated services arrangements. In these types of arrangements, revenue from sales of third-party vendor products or services is recorded net of costs when the company is acting as an agent between the client and the vendor, and gross when the company is the principal for the transaction. To determine whether the company is an agent or principal, the company considers whether it obtains control of the products or services before they are transferred to the customer. In making this evaluation, several factors are considered, most notably whether the company has primary responsibility for fulfillment to the client, as well as inventory risk and pricing discretion. The company recognizes revenue on sales to solution providers, resellers and distributors (herein referred to as resellers) when the reseller has economic substance apart from the company and the reseller is considered the principal for the transaction with the end-user client. The company reports revenue net of any revenue-based taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue-producing transactions. In addition to the aforementioned general policies, the following are the specific revenue recognition policies for arrangements with multiple performance obligations and for each major category of revenue. Arrangements with Multiple Performance Obligations The company’s global capabilities as a hybrid cloud platform and AI company include services, software, hardware and related financing. The company enters into revenue arrangements that may consist of any combination of these products and services based on the needs of its clients. The company continues to develop new products and offerings and their associated consumption and delivery methods, including the use of cloud and as-a-Service models. These are not separate businesses; they are offerings across the segments that address market opportunities in areas such as analytics, data, cloud, security, AI and sustainability. Revenue from these offerings follows the specific revenue recognition policies for arrangements with multiple performance obligations and for each major category of revenue, depending on the type of offering, which are comprised of services, software and/or hardware. To the extent that a product or service in multiple performance obligation arrangements is subject to other specific accounting guidance, such as leasing guidance, that product or service is accounted for in accordance with such specific guidance. For all other products or services in these arrangements, the company determines if the products or services are distinct and allocates the consideration to each distinct performance obligation on a relative standalone selling price basis. When products and services are not distinct, the company determines an appropriate measure of progress based on the nature of its overall promise for the single performance obligation. The revenue policies in the Services, Hardware and/or Software sections below are applied to each performance obligation, as applicable. Services The company’s primary services offerings include consulting services, including business transformation; technology consulting and application operations including the design and development of complex IT environments to a client’s specifications (e.g., design and build); cloud services; business process outsourcing; and infrastructure support. Many of these services can be delivered entirely or partially through cloud or as-a-Service delivery models. The company’s services are provided on a time-and-material basis, as a fixed-price contract or as a fixed-price per measure of output contract and the contract terms generally range from less than one year to 5 years. In services arrangements, the company typically satisfies the performance obligation and recognizes revenue over time. In design and build arrangements, the performance obligation is satisfied over time either because the client controls the asset as it is created (e.g., when the asset is built at the customer site) or because the company’s performance does not create an asset with an alternative use and the company has an enforceable right to payment plus a reasonable profit for performance completed to date. In most other services arrangements, the performance obligation is satisfied over time because the client simultaneously receives and consumes the benefits provided as the company performs the services. Revenue from time-and-material contracts is recognized on an output basis as labor hours are delivered and/or direct expenses are incurred. Revenue from as-a-Service type contracts, such as Infrastructure-as-a-Service, is recognized either on a straight-line basis or on a usage basis, depending on the terms of the arrangement (such as whether the company is standing ready to perform or whether the contract has usage-based metrics). If an as-a-Service contract includes setup activities, those promises in the arrangement are evaluated to determine if they are distinct. In areas such as application management, business process outsourcing and other cloud-based services arrangements, the company determines whether the services performed during the initial phases of the arrangement, such as setup activities, are distinct. In most cases, the arrangement is a single performance obligation comprised of a series of distinct services that are substantially the same and that have the same pattern of transfer (i.e., distinct days of service). The company applies a measure of progress (typically time-based) to any fixed consideration and allocates variable consideration to the distinct periods of service based on usage. As a result, revenue is generally recognized over the period the services are provided on a usage basis. This results in revenue recognition that corresponds with the value to the client of the services transferred to date relative to the remaining services promised. Revenue related to maintenance and technology lifecycle support and extended warranty is recognized on a straight-line basis over the period of performance because the company is standing ready to provide services. In design and build contracts, revenue is recognized based on progress toward completion of the performance obligation using a cost-to-cost measure of progress. Revenue is recognized based on the labor costs incurred to date as a percentage of the total estimated labor costs to fulfill the contract. Due to the nature of the work performed in these arrangements, the estimation of cost at completion is complex, subject to many variables and requires significant judgment. Key factors reviewed by the company to estimate costs to complete each contract are future labor and product costs and expected productivity efficiencies. Changes in original estimates are reflected in revenue on a cumulative catch-up basis in the period in which the circumstances that gave rise to the revision become known by the company. Refer to note C, “Revenue Recognition,” for the amount of revenue recognized in the reporting period on a cumulative catch-up basis (i.e., from performance obligations satisfied, or partially satisfied, in previous periods). The company performs ongoing profitability analyses of its design and build services contracts accounted for using a cost-to-cost measure of progress in order to determine whether the latest estimates of revenues, costs and profits require updating. If at any time these estimates indicate that the contract will be unprofitable, the entire estimated loss for the remainder of the contract is recorded immediately. For other types of services contracts, any losses are recorded as incurred. In some services contracts, the company bills the client prior to recognizing revenue from performing the services. Deferred income of $3,444 million and $3,241 million at December 31, 2023 and 2022, respectively, is included in the Consolidated Balance Sheet. In other services contracts, the company performs the services prior to billing the client. When the company performs services prior to billing the client in design and build contracts, the right to consideration is typically subject to milestone completion or client acceptance and the unbilled accounts receivable is classified as a contract asset. At December 31, 2023 and 2022, contract assets for services contracts of $420 million and $426 million, respectively, are included in prepaid expenses and other current assets in the Consolidated Balance Sheet. The remaining amount of unbilled accounts receivable of $816 million and $788 million at December 31, 2023 and 2022, respectively, is included in notes and accounts receivable–trade in the Consolidated Balance Sheet. Billings usually occur in the month after the company performs the services or in accordance with specific contractual provisions. Hardware The company’s hardware offerings include the sale or lease of Hybrid Infrastructure solutions including zSystems as well as Distributed Infrastructure solutions such as Power and Storage solutions. The capabilities of these products can also be delivered through as-a-Service or cloud delivery models, such as Infrastructure-as-a-Service and Storage-as-a-Service. The company also offers installation services for its more complex hardware products. Hardware offerings are often sold with distinct maintenance services, described in the Services section above. Revenue from hardware sales is recognized when control has transferred to the customer which typically occurs when the hardware has been shipped to the client, risk of loss has transferred to the client and the company has a present right to payment for the hardware. In limited circumstances when a hardware sale includes client acceptance provisions, revenue is recognized either when client acceptance has been obtained, client acceptance provisions have lapsed, or the company has objective evidence that the criteria specified in the client acceptance provisions have been satisfied. Revenue from hardware sales-type leases is recognized at the beginning of the lease term. Revenue from rentals and operating leases is recognized on a straight-line basis over the term of the rental or lease. Revenue from as-a-Service arrangements is recognized either on a straight-line basis or on a usage basis as described in the Services section above. Installation services are accounted for as distinct performance obligations with revenue recognized as the services are performed. Shipping and handling activities that occur after the client has obtained control of a product are accounted for as an activity to fulfill the promise to transfer the product rather than as an additional promised service and, therefore, no revenue is deferred and recognized over the shipping period. Software The company’s software offerings include hybrid platform software solutions, which contain many of the company’s strategic areas including Red Hat, automation, data and AI, security and sustainability; transaction processing, which primarily supports mission-critical systems for clients; and distributed infrastructure software, which provides operating systems for zSystems and Power Systems hardware. These offerings include proprietary software and open-source software, and many can be delivered entirely or partially through as-a-Service or cloud delivery models, while others are delivered as on-premise software licenses. Revenue from proprietary perpetual (one-time charge) license software is recognized at a point in time at the inception of the arrangement when control transfers to the client, if the software license is distinct from the post-contract support (PCS) offered by the company. Revenue from proprietary term license software is recognized at a point in time for the committed term of the contract, unless consideration depends on client usage, in which case revenue is recognized when the usage occurs. Proprietary term licenses often have a one-month contract term due to client termination rights, in which case, revenue would be recognized in that month for both the license and PCS. Clients may contract to convert their existing IBM term license software into perpetual license software plus PCS. When proprietary term license software is converted to perpetual license software, the consideration becomes fixed with no cancellability and, therefore, revenue for the perpetual license is recognized upon conversion, consistent with the accounting for other perpetual licenses, as described above. PCS revenue is recognized as described below. The company also has open-source software offerings. Since open-source software is offered under an open-source licensing model and therefore, the license is available for free, the standalone selling price is zero. As such, when the license is sold with PCS or other products and services, no consideration is allocated to the license when it is a distinct performance obligation and therefore no revenue is recognized when control of the license transfers to the client. Revenue is recognized over the PCS period. In certain cases, open-source software is bundled with proprietary software and, if the open-source software is not considered distinct, the software bundle is accounted for under a proprietary software model. Revenue from PCS is recognized over the contract term on a straight-line basis because the company is providing a service of standing ready to provide support, when-and-if needed, and is providing unspecified software upgrades on a when-and-if available basis over the contract term. Revenue from software hosting or Software-as-a-Service (SaaS) arrangements is recognized either on a straight-line basis or on a usage basis as described in the Services section above. In software hosting arrangements, the rights provided to the client (e.g., ownership of a license, contract termination provisions and the feasibility of the client to operate the software) are considered in determining whether the arrangement includes a license. In arrangements that include a software license, the associated revenue is recognized in accordance with the software license recognition policy above rather than over time as a service. Financing Financing income attributable to sales-type leases, direct financing leases and loans is recognized on the accrual basis using the effective interest method. Operating lease income Standalone Selling Price The company allocates the transaction price to each performance obligation on a relative standalone selling price basis. The standalone selling price (SSP) is the price at which the company would sell a promised product or service separately to a client. In most cases, the company is able to establish SSP based on the observable prices of products or services sold separately in comparable circumstances to similar clients. The company typically establishes SSP ranges for its products and services which are reassessed on a periodic basis or when facts and circumstances change. In certain instances, the company may not be able to establish a SSP range based on observable prices, and as a result, the company estimates SSP. The company estimates SSP by considering multiple factors including, but not limited to, overall market conditions, including geographic or regional specific factors, internal costs, profit objectives and pricing practices. Additionally, in certain circumstances, the company may estimate SSP for a product or service by applying the residual approach. Estimating SSP is a formal process that includes review and approval by the company’s management. |
Service Costs, Software Costs, Incremental Costs of Obtaining a Contract, Product Warranties and Shipping and Handling | Services Costs Recurring operating costs for services contracts are recognized as incurred. For fixed-price design and build contracts, the costs of external hardware and software accounted for under the cost-to-cost measure of progress are deferred and recognized based on the labor costs incurred to date (i.e., the measure of progress), as a percentage of the total estimated labor costs to fulfill the contract as control transfers over time for these performance obligations. Certain eligible, non-recurring costs (i.e., setup costs) incurred in the initial phases of business process outsourcing contracts and other cloud-based services contracts, including Software-as-a-Service arrangements, are capitalized when the costs relate directly to the contract, the costs generate or enhance resources of the company that will be used in satisfying the performance obligation in the future, and the costs are expected to be recovered. These costs consist of transition and setup costs related to the provisioning, configuring, implementation and training and other deferred fulfillment costs, including, for example, prepaid assets used in services contracts (i.e., prepaid software or prepaid maintenance). Capitalized costs are amortized on a straight-line basis over the expected period of benefit, which can include anticipated contract renewals or extensions, consistent with the transfer to the client of the services to which the asset relates. Additionally, fixed assets associated with these contracts are capitalized and depreciated on a straight-line basis over the expected useful life of the asset. If an asset is contract specific, then the depreciation period is the shorter of the useful life of the asset or the contract term. Amounts paid to clients in excess of the fair value of acquired assets used in business process outsourcing arrangements are deferred and amortized on a straight-line basis as a reduction of revenue over the expected period of benefit. The company performs periodic reviews to assess the recoverability of deferred contract transition and setup costs. If the carrying amount is deemed not recoverable, an impairment loss is recognized. Refer to note C, “Revenue Recognition,” for the amount of deferred costs to fulfill a contract at December 31, 2023 and 2022. In situations in which a business process outsourcing or other cloud-based services contract is terminated, the terms of the contract may require the client to reimburse the company for the recovery of unbilled accounts receivable, unamortized deferred contract costs and additional costs incurred by the company to transition the services. Software Costs Costs that are related to the conceptual formulation and design of licensed software programs are expensed as incurred to research, development and engineering expense; costs that are incurred to produce the finished product after technological feasibility has been established are capitalized as an intangible asset. Capitalized amounts are amortized on a straight-line basis over periods ranging up to three years and are recorded in software cost within cost of sales. The company performs periodic reviews to ensure that unamortized program costs remain recoverable from future revenue. Costs to support or service licensed programs are charged to software cost within cost of sales as incurred. The company capitalizes certain costs that are incurred to purchase or develop internal-use software. Internal-use software programs also include software used by the company to deliver Software-as-a-Service when the client does not receive a license to the software and the company has no substantive plans to market the software externally. Capitalized costs are amortized on a straight-line basis over periods ranging up to three years and are recorded in selling, general and administrative expense or cost of sales, depending on whether the software is used by the company in revenue generating transactions. Additionally, the company may capitalize certain types of implementation costs and amortize them over the term of the arrangement when the company is a customer in a cloud-computing arrangement. Incremental Costs of Obtaining a Contract Incremental costs of obtaining a contract (e.g., sales commissions) are capitalized and amortized on a straight-line basis over the expected customer relationship period if the company expects to recover those costs. The expected customer relationship period, determined based on the average customer relationship period, including expected renewals, for each offering type, is three years. Expected renewal periods are only included in the expected customer relationship period if commission amounts paid upon renewal are not commensurate with amounts paid on the initial contract. Incremental costs of obtaining a contract include only those costs the company incurs to obtain a contract that it would not have incurred if the contract had not been obtained. The company has determined that certain commissions programs meet the requirements to be capitalized. Some commission programs are not subject to capitalization as the commission expense is paid and recognized as the related revenue is recognized. Additionally, as a practical expedient, the company expenses costs to obtain a contract as incurred if the amortization period would have been a year or less. These costs are included in selling, general and administrative expenses. Product Warranties The company offers warranties for its hardware products that generally range up to three years, with the majority being either one Revenue from extended warranty contracts is initially recorded as deferred income and subsequently recognized on a straight-line basis over the delivery period because the company is providing a service of standing ready to provide services over such term. Refer to note R, “Commitments & Contingencies,” for additional information. Shipping and Handling Costs related to shipping and handling are recognized as incurred and included in cost in the Consolidated Income Statement. |
Selling, General and Administrative | Selling, General and Administrative Selling, general and administrative (SG&A) expense is charged to income as incurred, except for certain sales commissions, which are capitalized and amortized. For further information regarding capitalizing sales commissions, see “Incremental Costs of Obtaining a Contract” above. Expenses of promoting and selling products and services are classified as selling expense and, in addition to sales commissions, include such items as compensation, advertising and travel. General and administrative expense includes such items as compensation, legal costs, office supplies, non-income taxes, insurance and office rental. In addition, general and administrative expense includes other operating items such as an allowance for credit losses, workforce rebalancing charges for contractually obligated payments to employees terminated in the ongoing course of business, acquisition costs related to business combinations, amortization of certain intangible assets and environmental remediation costs. |
Advertising and Promotional Expense | Advertising and Promotional Expense The company expenses advertising and promotional costs as incurred. Cooperative advertising reimbursements from vendors are recorded net of advertising and promotional expense in the period in which the related advertising and promotional expense is incurred. Advertising and promotional expense, which includes media, agency and promotional expense, was $1,237 million, $1,330 million and $1,413 million in 2023, 2022 and 2021, respectively, and is recorded in SG&A expense in the Consolidated Income Statement. |
Research, Development and Engineering | Research, Development and Engineering Research, development and engineering (RD&E) costs are expensed as incurred. Software costs that are incurred to produce the finished product after technological feasibility has been established are capitalized as an intangible asset. |
Intellectual Property and Custom Development Income | Intellectual Property and Custom Development Income The company licenses and sells the rights to certain of its intellectual property (IP) including internally developed patents, trade secrets and technological know-how. Certain IP transactions to third parties are licensing/royalty-based and others are transaction-based sales/other transfers. Income from licensing arrangements is recognized at the inception of the license term if the nature of the company’s promise is to provide a right to use the company’s intellectual property as it exists at that point in time (i.e., the license is functional intellectual property) and control has transferred to the client. Income is recognized over time if the nature of the company’s promise is to provide a right to access the company’s intellectual property throughout the license period (i.e., the license is symbolic intellectual property), such as a trademark license. Income from royalty-based fee arrangements is recognized at the later of when the subsequent sale or usage occurs or the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). The company also enters into cross-licensing arrangements of patents, and income from these arrangements is recognized when control transfers to the customer. In addition, the company earns income from certain custom development projects with strategic technology partners and specific clients. The company records the income from these projects over time as the company satisfies the performance obligation if there are no repayment provisions and the fee is not dependent upon the ultimate success of the project. |
Government Assistance | Government Assistance The company receives grants from governments and government agencies (government) in support of certain of the company’s business activities, primarily related to research, job creation, or job training. Grants are generally received in the form of cash as either a recovery for expenses incurred or as an incentive for meeting certain requirements as agreed to in the grant, with terms ranging from one |
Business Combinations and Intangible Assets Including Goodwill | Business Combinations and Intangible Assets Including Goodwill The company accounts for business combinations using the acquisition method and accordingly, the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree are generally recorded at their acquisition date fair values. Contract assets and contract liabilities are measured in accordance with the guidance on revenue recognition. Goodwill represents the excess of the purchase price over the fair value of net assets, including the amount assigned to identifiable intangible assets. The primary drivers that generate goodwill are the value of synergies between the acquired entities and the company and the acquired assembled workforce, neither of which qualifies as a separately identifiable intangible asset. Goodwill recorded in an acquisition is assigned to applicable reporting units based on expected revenues or expected cash flows. Identifiable intangible assets with finite lives are amortized over their useful lives. Amortization of completed technology is recorded in cost, and amortization of all other intangible assets is recorded in SG&A expense. Acquisition-related costs, including advisory, legal, accounting, valuation and pre-close and other costs, are typically expensed in the periods in which the costs are incurred and are recorded in SG&A expense. The results of operations of acquired businesses are included in the Consolidated Financial Statements from the acquisition date. |
Impairment | Impairment Long-lived assets, other than goodwill, are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The impairment test is typically based on undiscounted cash flows and, if impaired, the asset is written down to fair value based on either discounted cash flows or appraised values. Goodwill is tested for impairment at least annually, in the fourth quarter and whenever changes in circumstances indicate an impairment may exist. The goodwill impairment test is performed at the reporting unit level, which is generally at the level of or one level below an operating segment. |
Depreciation and Amortization | Depreciation and Amortization Property, plant and equipment are carried at cost and depreciated over their estimated useful lives using the straight-line method. The estimated useful lives of certain depreciable assets are as follows: buildings, 30 to 50 years; building equipment, 10 to 20 years; land improvements, 20 years; production, engineering, office and other equipment, 2 to 20 years; and information technology equipment, 1.5 to 6 years. Leasehold improvements are amortized over the shorter of their estimated useful lives or the related lease term, rarely exceeding 25 years. Refer to the “Basis of Presentation” section above for additional information about the useful lives of information technology equipment. As noted within the “Software Costs” section of this note, capitalized software costs are amortized on a straight-line basis over periods ranging up to 3 years. Other intangible assets are amortized over periods between 1 and 20 years. |
Environmental | Environmental The cost of internal environmental protection programs that are preventative in nature are expensed as incurred. When a cleanup program becomes likely, and it is probable that the company will incur cleanup costs and those costs can be reasonably estimated, the company accrues remediation costs for known environmental liabilities. |
Asset Retirement Obligations | Asset Retirement Obligations Asset retirement obligations (ARO) are legal obligations associated with the retirement of long-lived assets and the liability is initially recorded at fair value. The related asset retirement costs are capitalized by increasing the carrying amount of the related assets by the same amount as the liability. Asset retirement costs are subsequently depreciated over the useful lives of the related assets. Subsequent to initial recognition, the company records period-to-period changes in the ARO liability resulting from the passage of time in interest expense and revisions to either the timing or the amount of the original expected cash flows to the related assets. |
Defined Benefit Pension and Nonpension Postretirement Benefit Plans and Defined Contribution Plans | Defined Benefit Pension and Nonpension Postretirement Benefit Plans The funded status of the company’s defined benefit pension plans and nonpension postretirement benefit plans (retirement-related benefit plans) is recognized in the Consolidated Balance Sheet. The funded status is measured as the difference between the fair value of plan assets and the benefit obligation at December 31, the measurement date. For defined benefit pension plans, the benefit obligation is the projected benefit obligation (PBO), which represents the actuarial present value of benefits expected to be paid upon retirement based on employee services already rendered and estimated future compensation levels. For the nonpension postretirement benefit plans, the benefit obligation is the accumulated postretirement benefit obligation (APBO), which represents the actuarial present value of postretirement benefits attributed to employee services already rendered. The fair value of plan assets represents the current market value of assets held in an irrevocable trust fund, held for the sole benefit of participants, which are invested by the trust fund. Overfunded plans, with the fair value of plan assets exceeding the benefit obligation, are aggregated and recorded as a prepaid pension asset equal to this excess. Underfunded plans, with the benefit obligation exceeding the fair value of plan assets, are aggregated and recorded as a retirement and nonpension postretirement benefit obligation equal to this excess. The current portion of the retirement and nonpension postretirement benefit obligations represents the actuarial present value of benefits payable in the next 12 months exceeding the fair value of plan assets, measured on a plan-by-plan basis. This obligation is recorded in compensation and benefits in the Consolidated Balance Sheet. Net periodic pension and nonpension postretirement benefit cost/(income) is recorded in the Consolidated Income Statement and includes service cost, interest cost, expected return on plan assets, amortization of prior service costs/(credits) and (gains)/losses previously recognized as a component of other comprehensive income/(loss) (OCI) and amortization of the net transition asset remaining in accumulated other comprehensive income/(loss) (AOCI). The service cost component of net benefit cost is recorded in Cost, SG&A and RD&E in the Consolidated Income Statement (unless eligible for capitalization) based on the employees’ respective functions. The other components of net benefit cost are presented separately from service cost within other (income) and expense in the Consolidated Income Statement. (Gains)/losses and prior service costs/(credits) are recognized as a component of OCI in the Consolidated Statement of Comprehensive Income as they arise. Those (gains)/losses and prior service costs/(credits) are subsequently recognized as a component of net periodic cost/(income) pursuant to the recognition and amortization provisions of applicable accounting guidance. (Gains)/losses arise as a result of differences between actual experience and assumptions or as a result of changes in actuarial assumptions. Prior service costs/(credits) represent the cost of benefit changes attributable to prior service granted in plan amendments. The measurement of benefit obligations and net periodic cost/(income) is based on estimates and assumptions approved by the company’s management. These valuations reflect the terms of the plans and use participant-specific information such as compensation, age and years of service, as well as certain assumptions, including estimates of discount rates, expected return on plan assets, rate of compensation increases, interest crediting rates and mortality rates. Defined Contribution Plans The company’s contribution for defined contribution plans is recorded when the employee renders service to the company. The charge is recorded in Cost, SG&A and RD&E in the Consolidated Income Statement based on the employees’ respective functions. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation represents the cost related to stock-based awards granted to employees. The company measures stock-based compensation cost at the grant date, based on the estimated fair value of the award and recognizes the cost on a straight-line basis (net of estimated forfeitures) over the employee requisite service period. The company grants its employees Restricted Stock Units (RSUs), including Retention Restricted Stock Units (RRSUs); Performance Share Units (PSUs); and stock options. RSUs are stock awards granted to employees that entitle the holder to shares of common stock as the award vests, typically over a one The company records deferred tax assets for awards that result in deductions on the company’s income tax returns, based on the amount of compensation cost recognized and the relevant statutory tax rates. The differences between the deferred tax assets recognized for financial reporting purposes and the actual tax deduction reported on the income tax return are recorded as a benefit or expense to the provision for income taxes in the Consolidated Income Statement. |
Income Taxes | Income Taxes Income tax expense is based on reported income before income taxes. Deferred income taxes reflect the tax effect of temporary differences between asset and liability amounts that are recognized for financial reporting purposes and the amounts that are recognized for income tax purposes. These deferred taxes are measured by applying currently enacted tax laws. The company includes Global Intangible Low-Taxed Income (GILTI) in measuring deferred taxes. Valuation allowances are recognized to reduce deferred tax assets to the amount that will more likely than not be realized. In assessing the need for a valuation allowance, management considers all available evidence for each jurisdiction including past operating results, estimates of future taxable income and the feasibility of ongoing tax planning strategies/actions. When the company changes its determination as to the amount of deferred tax assets that can be realized, the valuation allowance is adjusted with a corresponding impact to income tax expense in the period in which such determination is made. The company recognizes additional tax liabilities when the company believes that certain positions may not be fully sustained upon review by tax authorities. Benefits from tax positions are measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon settlement. The noncurrent portion of tax liabilities is included in other liabilities in the Consolidated Balance Sheet. To the extent that new information becomes available which causes the company to change its judgment regarding the adequacy of existing tax liabilities, such changes to tax liabilities will impact income tax expense in the period in which such determination is made. Interest and penalties, if any, related to accrued liabilities for potential tax assessments are included in income tax expense. |
Translation of Non-U.S. Currency Amounts | Translation of Non-U.S. Currency Amounts Assets and liabilities of non-U.S. subsidiaries that have a local functional currency are translated to U.S. dollars at year-end exchange rates. Translation adjustments are recorded in OCI. Income and expense items are translated at weighted-average rates of exchange prevailing during the year. Inventory, property, plant and equipment—net and other non-monetary assets and liabilities of non-U.S. subsidiaries and branches that operate in U.S. dollars are translated at the approximate exchange rates prevailing when the company acquired the assets or liabilities. All other assets and liabilities denominated in a currency other than U.S. dollars are translated at year-end exchange rates with the transaction gain or loss recognized in other (income) and expense. Income and expense items are translated at the weighted-average rates of exchange prevailing during the year. These translation gains and losses are included in net income for the period in which exchange rates change. |
Derivative Financial Instruments | Derivative Financial Instruments The company uses derivative financial instruments primarily to manage foreign currency and interest rate risk, and to a lesser extent, equity and credit risk. The company does not use derivative financial instruments for trading or speculative purposes. Derivatives that qualify for hedge accounting can be designated as either cash flow hedges, net investment hedges, or fair value hedges. The company may enter into derivative contracts that economically hedge certain of its risks, even when hedge accounting does not apply, or the company elects not to apply hedge accounting. Derivatives are recognized in the Consolidated Balance Sheet at fair value on a gross basis as either assets or liabilities and classified as current or noncurrent based upon whether the maturity of the instrument is less than or greater than 12 months. Changes in the fair value of derivatives designated as a cash flow hedge are recorded, net of applicable taxes, in OCI and subsequently reclassified into the same income statement line as the hedged exposure when the underlying hedged item is recognized in earnings. For forward contracts designated as cash flow hedges of the principal associated with foreign currency denominated debt, the company excludes the initial forward points from the assessment of hedge effectiveness and recognizes it in other (income) and expense in the Consolidated Income Statement on a straight-line basis over the life of the hedging instrument. Changes in the fair value of the amounts excluded from the assessment of hedge effectiveness are recognized in OCI. Effectiveness for net investment hedging derivatives is measured on a spot-to-spot basis. Changes in the fair value of highly effective net investment hedging derivatives and other non-derivative financial instruments designated as net investment hedges are recorded as foreign currency translation adjustments in AOCI. Changes in the fair value of the portion of a net investment hedging derivative excluded from the assessment of effectiveness are recorded in interest expense and cost of financing. Changes in the fair value of interest rate derivatives designated as a fair value hedge and the offsetting changes in the fair value of the underlying hedged exposure are recorded in interest expense and cost of financing. Changes in the fair value of derivatives not designated as hedges are reported in earnings primarily in other (income) and expense. See note T, “Derivative Financial Instruments,” for further information. The cash flows associated with derivatives designated as fair value and cash flow hedges are reported in cash flows from operating activities in the Consolidated Statement of Cash Flows. Cash flows from derivatives designated as net investment hedges and derivatives not designated as hedges are reported in cash flows from investing activities in the Consolidated Statement of Cash Flows. Cash flows from derivatives designated as hedges of foreign currency denominated debt directly associated with the settlement of the principal are reported in payments to settle debt in cash flows from financing activities in the Consolidated Statement of Cash Flows. |
Financial Instruments and Fair Value Measurement | Financial Instruments In determining the fair value of its financial instruments, the company uses a variety of methods and assumptions that are based on market conditions and risks existing at each balance sheet date. See note J, “Financial Assets & Liabilities,” for further information. All methods of assessing fair value result in a general approximation of value, and such value may never actually be realized. Fair Value Measurement 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 maintain principal by investing in very liquid and highly rated investment grade securities. Available-for-sale securities are measured for impairment on a recurring basis by comparing the security’s fair value with its amortized cost basis. If the fair value of the security falls below its amortized cost basis, the change in fair value is recognized in the period the impairment is identified when the loss is due to credit factors. The change in fair value due to non-credit factors is recorded in other comprehensive income when the company does not intend to sell and has the ability to hold the investment. The company’s standard practice is to hold all of its debt security investments classified as available-for-sale until maturity. There were no impairments for credit losses and no material non-credit impairments recognized for the years ended December 31, 2023, 2022 and 2021. Certain nonfinancial assets such as property, plant and equipment, land, goodwill and intangible assets are subject to non-recurring fair value measurements if they are deemed to be impaired. The impairment models used for nonfinancial assets depend on the type of asset. There were no material impairments of nonfinancial assets for the years ended December 31, 2023, 2022 and 2021. |
Cash Equivalents | Cash Equivalents All highly liquid investments with maturities of three months or less at the date of purchase are considered to be cash equivalents. |
Marketable Securities | Marketable Securities The company measures equity investments at fair value with changes recognized in net income. |
Inventory | Inventory Raw materials, work in process and finished goods are stated at the lower of average cost or net realizable value. |
Notes and Accounts Receivable-Trade and Contract Assets | Notes and Accounts Receivable—Trade and Contract Assets The company classifies the right to consideration in exchange for products or services transferred to a client as either a receivable or a contract asset. A receivable is a right to consideration that is unconditional as compared to a contract asset which is a right to consideration that is conditional upon factors other than the passage of time. The majority of the company’s contract assets represent unbilled amounts related to design and build services contracts when the cost-to-cost method of revenue recognition is utilized, revenue recognized exceeds the amount billed to the client, and the right to consideration is subject to milestone completion or client acceptance. Contract assets are generally classified as current and are recorded on a net basis with deferred income (i.e., contract liabilities) at the contract level. |
Financing Receivables | Financing Receivables Financing receivables primarily consist of client loan and installment payment receivables (loans) and investment in sales-type and direct financing leases (collectively referred to as client financing receivables) and commercial financing receivables. Leases are accounted for in accordance with lease accounting standards. Loans, which are generally unsecured, are primarily for IBM hardware, software and services. Commercial financing receivables are primarily for working capital financing to business partners and distributors of IBM products and services. Financing receivables are classified as either held for sale or held for investment, depending on the company’s intent and ability to hold the underlying contract for the foreseeable future or until maturity or payoff. Loans and commercial financing receivables are recorded at amortized cost, which approximates fair value. |
Transfers of Financial Assets | Transfers of Financial Assets The company enters into arrangements to sell certain financial assets (primarily notes and accounts receivable–trade and financing receivables) to third-party financial institutions. For a transfer of financial assets to be considered a sale, the asset must be legally isolated from the company and the purchaser must have control of the asset. Determining whether all the requirements have been met includes an evaluation of legal considerations, the extent of the company’s continuing involvement with the assets transferred and any other relevant consideration. When the true sale criteria are met, the company derecognizes the carrying value of the financial asset transferred and recognizes a net gain or loss on the sale. The proceeds from these arrangements are reflected as cash provided by operating activities in the Consolidated Statement of Cash Flows. If the true sale criteria are not met, the transfer is considered a secured borrowing and the financial asset remains on the Consolidated Balance Sheet with proceeds from the sale recognized as debt and recorded as cash flows from financing activities in the Consolidated Statement of Cash Flows. Arrangements to sell notes and accounts receivable–trade are used in the normal course of business as part of the company’s cash and liquidity management. Facilities primarily in the U.S. and several countries in Europe enable the company to sell certain notes and accounts receivable–trade, without recourse, to third parties in order to manage credit, collection, concentration and currency risk. The gross amounts sold (the gross proceeds) under these arrangements were $3.4 billion, $3.3 billion and $1.8 billion for the years ended December 31, 2023, 2022 and 2021, respectively. Within the notes and accounts receivables–trade sold and derecognized from the Consolidated Balance Sheet, $0.5 billion, $1.0 billion, and $0.7 billion remained uncollected from customers at December 31, 2023, 2022 and 2021, respectively. The fees and the net gains and losses associated with the transfer of notes and accounts receivables-trade were not material for any of the periods presented. Refer to note L, “Financing Receivables,” for more information on transfers of financing receivables. |
Allowance for Credit Losses | Allowance for Credit Losses Receivables are recorded concurrent with billing and shipment of a product and/or delivery of a service to customers. An allowance for uncollectible trade receivables and contract assets, if needed, is estimated based on specific customer situations, current and future expected economic conditions, past experiences of losses, as well as an assessment of potential recoverability of the balance due. The company estimates its allowances for expected credit losses for financing receivables by considering past events, including any historical default, historical concessions and resulting troubled debt restructurings, current economic conditions, any non-freestanding mitigating credit enhancements, and certain forward-looking information, including reasonable and supportable forecasts. The methodologies that the company uses to calculate its financing receivables reserves, which are applied consistently to its different portfolios, are as follows: Individually Evaluated– The company reviews all financing receivables considered at risk quarterly, and performs an analysis based upon current information available about the client, such as financial statements, news reports, published credit ratings, current market-implied credit analysis, as well as collateral net of repossession cost, prior collection history and current and future expected economic conditions. For loans that are collateral dependent, impairment is measured using the fair value of the collateral when foreclosure is probable. Using this information, the company determines the expected cash flow for the receivable and calculates an estimate of the potential loss and the probability of loss. For those accounts in which the loss is probable, the company records a specific reserve. Collectively Evaluated– The company determines its allowances for credit losses for collectively evaluated financing receivables (unallocated) based on two portfolio segments: client financing receivables and commercial financing receivables. The company further segments the portfolio into three classes: Americas, Europe/Middle East/Africa (EMEA) and Asia Pacific. For client financing receivables, the company uses a credit loss model to calculate allowances based on its internal loss experience and current conditions and forecasts, by class of financing receivable. The company records an unallocated reserve that is calculated by applying a reserve rate to its portfolio, excluding accounts that have been individually evaluated and specifically reserved. This reserve rate is based upon credit rating, probability of default, term and loss history. The allowance is adjusted quarterly for expected recoveries of amounts that were previously written off or are expected to be written off. Recoveries cannot exceed the aggregated amount of the previous write-off or expected write-off. The company considers forward-looking macroeconomic variables such as gross domestic product, unemployment rates, equity prices and corporate profits when quantifying the impact of economic forecasts on its client financing receivables allowance for expected credit losses. Macroeconomic variables may vary by class of financing receivables based on historical experiences, portfolio composition and current environment. The company also considers the impact of current conditions and economic forecasts relating to specific industries, geographical areas, and client credit ratings, in addition to performing a qualitative review of credit risk factors across the portfolio. Under this approach, forecasts of these variables over two years are considered reasonable and supportable. Beyond two years, the company reverts to long-term average loss experience. Forward-looking estimates require the use of judgment, particularly in times of economic uncertainty. The portfolio of commercial financing receivables is short term in nature and any allowance for these assets is estimated based on a combination of write-off history and current economic conditions, excluding any individually evaluated accounts. Other Credit-Related Policies Past Due– The company views client financing receivables as past due when payment has not been received after 90 days, measured from the original billing date. Non-Accrual– Non-accrual assets include those receivables (impaired loans or nonperforming leases) with specific reserves and other accounts for which it is likely that the company will be unable to collect all amounts due according to original terms of the lease or loan agreement. Interest income recognition is discontinued on these receivables. Cash collections are first applied as a reduction to principal outstanding. Any cash received in excess of principal payments outstanding is recognized as interest income. Receivables may be removed from non-accrual status, if appropriate, based upon changes in client circumstances, such as a sustained history of payments. Write-Off– Receivable losses are charged against the allowance in the period in which the receivable is deemed uncollectible. Subsequent recoveries, if any, are credited to the allowance. Write-offs of receivables and associated reserves occur to the extent that the customer is no longer in operation and/or there is no reasonable expectation of additional collections or repossession. |
Supplier Financing | Supplier Financing accounts payable |
Leases | Leases The company conducts business as both a lessee and a lessor. In its ordinary course of business, the company enters into leases as a lessee for property, plant and equipment. The company is also the lessor of certain equipment, mainly through its Financing segment. When procuring goods or services, or upon entering into a contract with its clients, the company determines whether an arrangement contains a lease at its inception. As part of that evaluation, the company considers whether there is an implicitly or explicitly identified asset in the arrangement and whether the company, as the lessee, or the client, if the company is the lessor, has the right to control the use of that asset. |
Accounting for Leases as a Lessee | Accounting for Leases as a Lessee When the company is the lessee, all leases with a term of more than 12 months are recognized as right-of-use (ROU) assets and associated lease liabilities in the Consolidated Balance Sheet. The lease liabilities are measured at the lease commencement date and determined using the present value of the lease payments not yet paid and the company’s incremental borrowing rate, which approximates the rate at which the company would borrow on a secured basis in the country where the lease was executed. The interest rate implicit in the lease is generally not determinable in transactions where the company is the lessee. The ROU asset equals the lease liability adjusted for any initial direct costs (IDCs), prepaid rent and lease incentives. The company’s variable lease payments generally relate to payments tied to various indexes, non-lease components and payments above a contractual minimum fixed amount. Operating leases are included in operating right-of-use assets–net, current operating lease liabilities and operating lease liabilities in the Consolidated Balance Sheet. Finance leases are included in property, plant and equipment short-term debt long-term debt The company made a policy election to not recognize leases with a lease term of 12 months or less in the Consolidated Balance Sheet. For all asset classes, the company has elected the lessee practical expedient to combine lease and non-lease components (e.g., maintenance services) and account for the combined unit as a single lease component. A significant portion of the company’s lease portfolio is real estate, which are mainly accounted for as operating leases, and are primarily used for corporate offices and data centers. The average term of the real estate leases is approximately five years. The company also has equipment leases, such as IT equipment and vehicles, which have lease terms that range from two |
Accounting for Leases as a Lessor | Accounting for Leases as a Lessor The company typically enters into leases as an alternative means of realizing value from equipment that it would otherwise sell. Assets under lease primarily include new and used IBM equipment. IBM equipment generally consists of zSystems, Power and Storage products. Lease payments due to IBM are typically fixed and paid in equal installments over the lease term. The majority of the company’s leases do not contain variable payments that are dependent on an index or a rate. Variable lease payments that do not depend on an index or a rate (e.g., property taxes), that are paid directly by the company and are reimbursed by the client, are recorded as revenue, along with the related cost, in the period in which collection of these payments is probable. Payments that are made directly by the client to a third party, including certain property taxes and insurance, are not considered part of variable payments and therefore are not recorded by the company. The company has made a policy election to exclude from consideration in contracts all collections from sales and other similar taxes. The company’s payment terms for leases are typically unconditional. Therefore, in an instance when the client requests to terminate the lease prior to the end of the lease term, the client would typically be required to pay the remaining lease payments in full. At the end of the lease term, the company allows the client to either return the equipment, purchase the equipment at the then-current fair market value or at a pre-stated purchase price, or renew the lease based on mutually agreed upon terms. When lease arrangements include multiple performance obligations, the company allocates the consideration in the contract between the lease components and the non-lease components on a relative standalone selling price basis. Sales-Type and Direct Financing Leases For a sales-type or direct financing lease, the carrying amount of the asset is derecognized from inventory and a net investment in the lease is recorded. For a sales-type lease, the net investment in the lease is measured at commencement date as the sum of the lease receivable and the estimated residual value of the equipment less unearned income and allowance for credit losses. Any selling profit or loss arising from a sales-type lease is recorded at lease commencement. Selling profit or loss is presented on a gross basis when the company enters into a lease to realize value from a product that it would otherwise sell in its ordinary course of business. For segment reporting, the net investment in sales-type leases excluding the allowance for credit losses is recognized as hardware revenue in the Infrastructure segment, while the estimated residual value less related unearned income is recognized as a reduction in revenue in the Other revenue category and represents the portion of fair value retained by the company. In transactions where the company enters into a lease for the purpose of generating revenue by providing financing, the selling profit or loss is presented on a net basis. Under a sales-type lease, initial direct costs are expensed at lease commencement. Over the term of the lease, the company recognizes finance income on the net investment in the lease and any variable lease payments, which are not included in the net investment in the lease. For a direct financing lease, the net investment in the lease is measured similarly to a sales-type lease, however, the net investment in the lease is reduced by any selling profit. In a direct financing lease, the selling profit and initial direct costs are deferred at commencement and recognized over the lease term. The company rarely enters into direct financing leases. The estimated residual value represents the estimated fair value of the equipment under lease at the end of the lease. The company estimates the future fair value of leased equipment by using historical models, analyzing the current market for new and used equipment and obtaining forward-looking product information such as marketing plans and technology innovations. The company optimizes the recovery of residual values by extending lease arrangements with, or selling leased equipment to existing clients, and periodically reassesses the realizable value of its lease residual values. Anticipated decreases in specific future residual values that are considered to be other-than-temporary are recognized immediately upon identification and are recorded as adjustments to the residual value estimate and unearned income, which reduces current period and future period financing income, respectively. |
Common Stock | Common Stock Common stock refers to the $.20 par value per share capital stock as designated in the company’s Certificate of Incorporation. Treasury stock is accounted for using the cost method. When treasury stock is reissued, the value is computed and recorded using a weighted-average basis. |
Earnings Per Share of Common Stock | Earnings Per Share of Common Stock |
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 note H, “Taxes,” 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 Matter s –As the guidance is a change to disclosures only, it will impact note D, “Segments,” 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 A, "Significant Accounting Policies," for additional information. Troubled Debt Restructurings and Vintage Disclosures Standard/Description– Issuance date: March 2022. This eliminates the accounting guidance for troubled debt restructurings and requires an entity to apply the general loan modification guidance to all loan modifications, including those made to customers experiencing financial difficulty, to determine whether the modification results in a new loan or a continuation of an existing loan. The guidance also requires presenting current-period gross write-offs by year of origination for financing receivables and net investment in leases. Effective Date and Adoption Considerations – The amendment was effective January 1, 2023 and early adoption was permitted. The company adopted the guidance as of the effective date. Effect on Financial Statements or Other Significant Matter s– |
Remaining Performance Obligations | 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. |
Segments | The segments represent components of the company for which separate financial information is available that is utilized on a regular basis by the chief operating decision maker (the chief executive officer) in determining how to allocate resources and evaluate performance. The segments are determined based on several factors, including client base, homogeneity of products, technology, delivery channels and similar economic characteristics. Certain transactions between the segments are recorded to other (income) and expense and are reflected in segment pre-tax income. The company utilizes globally integrated support organizations to realize economies of scale and efficient use of resources. As a result, a considerable amount of expense is shared by all of the segments. This shared expense includes sales coverage, certain marketing functions and support functions such as Accounting, Treasury, Procurement, Legal, Human Resources, Chief Information Office, and Billing and Collections. Where practical, shared expenses are allocated based on measurable drivers of expense, e.g., headcount. When a clear and measurable driver cannot be identified, shared expenses are allocated on a financial basis that is consistent with the company’s management system, e.g., advertising expense is allocated based on the gross profits of the segments. A portion of the shared expenses, which are recorded in net income, are not allocated to the segments. These expenses are associated with the elimination of internal transactions and other miscellaneous items. In the first quarter of 2024, the company announced 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 will not impact the company’s Consolidated Financial Statements, but will impact its reportable segments beginning in the first quarter of 2024. The changes include: Security services, previously reported in the Software segment moved to the Consulting segment; The Weather Company assets divested in January 2024 previously reported in the Software segment moved to the Other—divested businesses category; and stock-based compensation expense and non-Financing net interest expense are no longer included in the company's reportable segment results, consistent with the company's management system. Since these changes did not occur until first-quarter 2024, the periods presented in this Annual Report are reported under the historical segments. 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. Performance measurement is based on pre-tax income from continuing operations. 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. To ensure the efficient use of the company’s space and equipment, several segments may share leased or owned plant, property and equipment assets. Where assets are shared, landlord ownership of the assets is assigned to one segment and is not allocated to each user segment. This is consistent with the company’s management system and is reflected accordingly in the table below. In those cases, there will not be a precise correlation between segment pre-tax income and segment assets. Depreciation expense and capital expenditures that are reported by each segment also are consistent with the landlord ownership basis of asset assignment. Financing interest income of $680 million, $582 million and $628 million for the years ended December 31, 2023, 2022 and 2021, respectively, reflect the income associated with Financing's external client transactions, as well as the income from investment in cash and marketable securities. Financing interest expense of $298 million, $175 million and $129 million for the years ended December 31, 2023, 2022 and 2021, respectively, reflect the expense associated with intercompany loans and secured borrowings supporting Financing's external client transactions. These secured borrowings are included in note P, “Borrowings.” Intercompany financing activities are recorded to other (income) and expense and are reflected in segment pre-tax income. |
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 December 31, 2023 and 2022, 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 $50,121 million and $46,189 million, and the estimated fair value was $48,284 million and $42,514 million at December 31, 2023 and 2022, 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. |
Cash Payments Lease Costs | Cash payments related to variable lease costs and short-term leases are not included in the measurement of operating and finance lease liabilities |
Commitments | The company collectively evaluates the allowance for these arrangements using a provision methodology consistent with the portfolio of the commitments. 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. |
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 years ended December 31, 2023, 2022 and 2021 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. |
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 Effectiveness Testing | The company’s policy is to recognize all fair value changes in amounts excluded from effectiveness testing in net income each period. |
Stock Options | Stock options are granted at an exercise price equal to the company’s average high and low stock price on the date of grant.The company estimates the fair value of stock options at the date of grant using a Black-Scholes valuation model. Key inputs and assumptions used to estimate the fair value of stock options include the grant price of the award, the expected option term, volatility of the company’s stock, the risk-free rate and the company’s dividend yield. |
Option Settlement Policy | The company settles employee stock option exercises primarily with newly issued common shares and, occasionally, with treasury shares. |
Employee Stock Purchase Plan | Effective April 1, 2022, the company increased the discount for eligible participants to purchase shares of IBM common stock under its Employee Stock Purchase Plan (ESPP) from 5 percent to 15 percent off the average market price on the date of purchase. With this change, the ESPP is considered compensatory under the accounting requirements for stock-based compensation. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenue | ($ in millions) For the year ended December 31: 2023 2022 2021 Hybrid Platform & Solutions $ 18,693 $ 17,866 $ 17,036 Transaction Processing 7,615 7,171 6,390 Total Software $ 26,308 $ 25,037 $ 23,426 Business Transformation $ 9,179 $ 8,834 $ 8,284 Application Operations 6,958 6,508 6,095 Technology Consulting 3,849 3,765 3,466 Total Consulting $ 19,985 $ 19,107 $ 17,844 Hybrid Infrastructure $ 9,215 $ 9,451 $ 8,167 Infrastructure Support 5,377 5,837 6,021 Total Infrastructure $ 14,593 $ 15,288 $ 14,188 Financing (1) $ 741 $ 645 $ 774 Other $ 233 $ 453 $ 1,119 Total Revenue $ 61,860 $ 60,530 $ 57,350 (1) 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 | ($ in millions) For the year ended December 31: 2023 2022 2021 Americas $ 31,666 $ 31,057 $ 28,299 Europe/Middle East/Africa 18,492 17,950 17,447 Asia Pacific 11,702 11,522 11,604 Total $ 61,860 $ 60,530 $ 57,350 |
Schedule of reconciliation of contract balances | The following table provides information about notes and accounts receivable—trade, contract assets and deferred income balances. ($ in millions) At December 31: 2023 2022 Notes and accounts receivable — trade (net of allowances of $192 in 2023 and $233 in 2022) $ 7,214 $ 6,541 Contract assets (1) 505 464 Deferred income (current) 13,451 12,032 Deferred income (noncurrent) 3,533 3,499 (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 years ended December 31, 2023 and 2022. ($ in millions) January 1, 2023 Additions/(Releases) Write-offs Foreign currency and Other December 31, 2023 $233 $32 $(79) $6 $192 January 1, 2022 Additions/(Releases) Write-offs Foreign currency and Other December 31, 2022 $218 $59 $(31) $(14) $233 |
Schedule of deferred contract costs | ($ in millions) At December 31: 2023 2022 Capitalized costs to obtain a contract $ 686 $ 563 Deferred costs to fulfill a contract Deferred setup costs 399 456 Other deferred fulfillment costs 755 814 Total deferred costs (1) $ 1,841 $ 1,833 (1) Of the total deferred costs, $998 million was current and $842 million was noncurrent at December 31, 2023 and $967 million was current and $866 million was noncurrent at December 31, 2022. |
Segments (Tables)
Segments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Revenue and Pre-tax Income by Segment | ($ in millions) For the year ended December 31: Software Consulting Infrastructure Financing Total 2023 Revenue $ 26,308 $ 19,985 $ 14,593 $ 741 $ 61,627 Pre-tax income from continuing operations 6,571 1,918 2,421 374 11,283 Revenue year-to-year change 5.1 % 4.6 % (4.5) % 14.8 % 2.6 % Pre-tax income year-to-year change 6.6 % 14.4 % 7.0 % 10.1 % 8.1 % Pre-tax income margin 25.0 % 9.6 % 16.6 % 50.5 % 18.3 % 2022 Revenue $ 25,037 $ 19,107 $ 15,288 $ 645 $ 60,077 Pre-tax income from continuing operations 6,162 1,677 2,262 340 10,441 Revenue year-to-year change 6.9 % 7.1 % 7.8 % (16.6) % 6.8 % Pre-tax income year-to-year change 27.1 % 15.7 % 11.7 % (22.9) % 19.1 % Pre-tax income margin 24.6 % 8.8 % 14.8 % 52.6 % 17.4 % 2021 Revenue $ 23,426 $ 17,844 $ 14,188 $ 774 $ 56,231 Pre-tax income from continuing operations 4,849 1,449 2,025 441 8,765 |
Reconciliation of segment revenue and pre-tax income to IBM as reported | ($ in millions) For the year ended December 31: 2023 2022 2021 Revenue Total reportable segments $ 61,627 $ 60,077 $ 56,231 Other—divested businesses (2) 318 785 Other revenue 235 135 335 Total revenue $ 61,860 $ 60,530 $ 57,350 ($ in millions) For the year ended December 31: 2023 2022 2021 Pre-tax income from continuing operations Total reportable segments $ 11,283 $ 10,441 $ 8,765 Amortization of acquired intangible assets (1,627) (1,747) (1,838) Acquisition-related charges (33) (18) (43) Non-operating retirement-related (costs)/income (1) 39 (6,548) (1,282) Kyndryl-related impacts (2) — (351) 118 Workforce rebalancing charges (3) (435) — — Other—divested businesses 5 91 (102) Unallocated corporate amounts and other (541) (712) (782) Total pre-tax income from continuing operations $ 8,690 $ 1,156 $ 4,837 (1) 2022 includes a one-time, non-cash, pre-tax pension settlement charge of $5.9 billion. See note V, “Retirement-Related Benefits,” for additional information. (2) Net impacts for Kyndryl retained shares and related swaps. Refer to note E, “Acquisitions & Divestitures," and note T, "Derivative Financial Instruments," for additional information. (3) Beginning in the first quarter of 2023, the company updated its measure of segment pre-tax income, consistent with its management system, to no longer allocate workforce rebalancing charges to its reportable segments. Workforce rebalancing charges of $40 million and $182 million for 2022 and 2021, respectively, were included in the segments. |
Assets and Other Items by segment | ($ in millions) For the year ended December 31: Software Consulting Infrastructure Financing Total 2023 Assets $ 61,141 $ 14,342 $ 11,991 $ 14,409 $ 101,883 Depreciation/amortization of intangibles 526 106 1,018 8 1,659 Capital expenditures/investments in intangibles 385 20 836 15 1,255 2022 Assets $ 57,186 $ 13,481 $ 12,243 $ 15,757 $ 98,667 Depreciation/amortization of intangibles (1) 564 108 1,250 14 1,936 Capital expenditures/investments in intangibles 446 33 853 27 1,359 2021 Assets $ 58,420 $ 11,914 $ 11,766 $ 16,880 $ 98,980 Depreciation/amortization of intangibles (1) 598 97 1,257 49 2,001 Capital expenditures/investments in intangibles 559 55 792 33 1,439 (1) Recast to conform to 2023 presentation to remove amortization of acquired intangible assets. |
Reconciliation of assets to IBM as reported | ($ in millions) At December 31: 2023 2022 Assets Total reportable segments $ 101,883 $ 98,667 Elimination of internal transactions (1,028) (1,062) Other—divested businesses 19 100 Unallocated amounts Cash and marketable securities 12,907 8,138 Deferred tax assets 6,468 6,078 Plant, other property and equipment 1,838 1,760 Operating right-of-use assets 2,085 1,586 Pension assets 7,506 8,236 Other (1) 3,563 3,740 Total IBM consolidated assets $ 135,241 $ 127,243 (1) |
Geographic Information | The following tables provide information for those countries that are 10 percent or more of the specific category. Revenue (1) ($ in millions) For the year ended December 31: 2023 2022 2021 United States $ 25,309 $ 25,098 $ 22,893 Other countries (2) 36,551 35,432 34,457 Total revenue $ 61,860 $ 60,530 $ 57,350 (1) Revenues are attributed to countries based on the location of the client. (2) Prior periods reclassified to conform to the changes in 2023 presentation. Plant and Other Property–Net (1) ($ in millions) At December 31: 2023 2022 2021 United States $ 3,466 $ 3,209 $ 3,375 Other countries 2,027 2,100 2,293 Total $ 5,492 $ 5,308 $ 5,668 (1) Excludes rental machines. Operating Right-of-Use Assets–Net ($ in millions) At December 31: 2023 2022 2021 United States $ 1,249 $ 1,074 $ 1,148 Japan 340 259 398 Other countries 1,631 1,545 1,676 Total $ 3,220 $ 2,878 $ 3,222 |
Revenue by Classes of Similar Products or Services | The following table presents external revenue for similar classes of products or services within the company’s reportable segments. Client solutions often include IBM software and systems and other suppliers’ products if the client solution requires it. For each of the segments that include services, Software-as-a-Service, consulting, education, training and other product-related services are included as services. For each of these segments, software includes product license charges and ongoing subscriptions. ($ in millions) For the year ended December 31: 2023 2022 2021 Software Software $ 22,483 $ 21,374 $ 19,845 Services 3,764 3,575 3,485 Systems 62 88 96 Consulting Services $ 19,691 $ 18,857 $ 17,563 Software 212 170 173 Systems 82 80 108 Infrastructure Maintenance $ 4,138 $ 4,590 $ 4,743 Servers 4,253 4,471 3,483 Services 2,463 2,653 2,616 Storage 2,081 1,989 1,919 Software 1,658 1,585 1,426 Financing Financing $ 680 $ 582 $ 628 Used equipment sales $ 60 $ 64 $ 145 |
Acquisitions & Divestitures (Ta
Acquisitions & Divestitures (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of business acquisitions | Acquisition Segment Description of Acquired Business First Quarter StepZen, Inc. Software Developer of GraphQL to help build application programming interfaces (APIs) Asset Strategy Library (ASL) Portfolio of Uptake Technologies Software Library of industrial asset management data NS1 Software Leading provider of network automation SaaS solutions Second Quarter Ahana Cloud, Inc. Software Expert in open-source-based solutions for data analytics Polar Security Software Innovator in technology that helps companies discover, continuously monitor and secure cloud and SaaS application data Agyla SAS Consulting Leading provider of cloud platform engineering services in France specializing in Cloud, DevOps and Security Third Quarter Apptio, Inc. Software Leading provider of financial and operational IT management and optimization software which enables enterprise leaders to deliver enhanced business value across technology investments Fourth Quarter Manta Software, Inc. Software World-class data lineage platform to complement capabilities within watsonx.ai, watsonx.data and watsonx.governance Equine Global Consulting ERP specialist and cloud consulting services provider Acquisition Segment Description of Acquired Business First Quarter Envizi Software Data and analytics software provider for environmental performance management Sentaca Consulting Telco consulting services and solutions provider specializing in automation, cloud migration, and future networks for telecommunications providers Neudesic Consulting Application development and cloud computing services company Second Quarter Randori Software Leading attack surface management (ASM) and cybersecurity provider Databand.ai Software Proactive data observability platform that isolates data errors and issues to alert relevant stakeholders Third Quarter Omnio Software Developer of software connectors used in the collection of raw data for various Industrial Internet of Things (IoT) applications Fourth Quarter Dialexa Consulting Digital product engineering services firm Octo Consulting IT modernization and digital transformation services provider exclusively serving the U.S. federal government Acquisition Segment Description of Acquired Business First Quarter Nordcloud Consulting Consulting company providing services in cloud implementation, application transformation and managed services Taos Mountain, LLC (Taos) Consulting Leading cloud professional and managed services provider StackRox Software Innovator in container and Kubernetes-native security Second Quarter Turbonomic, Inc. (Turbonomic) Software Application Resource Management and Network Performance Management software provider ECX Copy Data Management business from Catalogic Software, Inc. Software Smart data protection solution Waeg Consulting Leading Salesforce consulting partner myInvenio Software Process mining software company Third Quarter VEVRE Software business from Volta, Inc. Software Cloud-native virtual routing engine BoxBoat Technologies Consulting Premier DevOps consultancy and enterprise Kubernetes certified service provider Bluetab Solutions Group Consulting Data solutions service provider Fourth Quarter SXiQ Digital Pty Ltd Consulting Digital transformation services company specializing in cloud applications, cloud platforms and cloud cybersecurity McD Tech Labs from McDonald’s Software Asset purchase to accelerate the development and deployment of McDonald’s Automated Order Taking (AOT) technology ReaQta Software Provider of endpoint security solutions designed to leverage AI to automatically identify and manage threats Adobe Workfront practice from Rego Consulting Corporation Consulting Work management software consulting for enterprise clients Phlyt Software Cloud-native development consultancy |
Business acquisition, purchase price allocation | The following table reflects the purchase price related to these acquisitions and the resulting purchase price allocations as of December 31, 2023. ($ in millions) Amortization Apptio, Inc. Other Current assets $ 146 $ 80 Property, plant and equipment/noncurrent assets 4 12 Intangible assets Goodwill N/A 3,541 401 Client relationships 6—10 770 44 Completed technology 5—7 530 108 Trademarks 1—5 35 2 Total assets acquired $ 5,027 $ 647 Current liabilities 249 41 Noncurrent liabilities 166 20 Total liabilities assumed $ 415 $ 62 Total purchase price $ 4,612 $ 585 N/A–Not applicable The following table reflects the purchase price related to these acquisitions and the resulting purchase price allocations as of December 31, 2023. Net purchase price adjustments recorded in 2023 were not material. ($ in millions) Amortization Octo Other Acquisitions Current assets $ 119 $ 87 Property, plant and equipment/noncurrent assets 8 8 Intangible assets Goodwill N/A 829 1,055 Client relationships 7—10 365 204 Completed technology 4—7 30 90 Trademarks 2—3 15 10 Total assets acquired $ 1,366 $ 1,454 Current liabilities 53 52 Noncurrent liabilities 50 15 Total liabilities assumed $ 103 $ 67 Total purchase price $ 1,264 $ 1,387 N/A–Not applicable The following table reflects the purchase price related to these acquisitions and the resulting purchase price allocations as of December 31, 2022. Net purchase price adjustments recorded in 2022 primarily related to deferred tax assets and liabilities. ($ in millions) Amortization Turbonomic Other Current assets $ 115 $ 112 Property, plant and equipment/noncurrent assets 11 18 Intangible assets Goodwill N/A 1,390 1,073 Client relationships 4—10 309 196 Completed technology 4—7 117 206 Trademarks 1—6 15 31 Total assets acquired $ 1,957 $ 1,636 Current liabilities 73 68 Noncurrent liabilities 55 56 Total liabilities assumed $ 128 $ 124 Total purchase price $ 1,829 $ 1,512 N/A–Not applicable |
Schedule of discontinued operations | The following table presents the major categories of income/(loss) from discontinued operations, net of tax. ($ in millions) For the year ended December 31: 2023 2022 2021 (1) Revenue $ — $ 7 $ 14,994 Cost of sales — 24 11,270 Selling, general and administrative expense (2) 22 86 1,900 RD&E and Other (income) and expense (1) (84) 80 Income/(loss) from discontinued operations before income taxes $ (20) $ (20) $ 1,744 Provision for/(benefit from) income taxes (3) (9) 124 714 Income/(loss) from discontinued operations, net of tax $ (12) $ (143) $ 1,030 (1) Excludes intercompany transactions between IBM and Kyndryl and general corporate overhead costs transferred to Kyndryl. (2) Prior periods recast to conform to 2023 presentation. (3) 2021 includes tax charges related to the Kyndryl separation. The following table presents selected financial information related to cash flows from discontinued operations. ($ in millions) For the year ended December 31: 2023 2022 2021 Net cash provided by/(used in) operating activities $ — $ — $ 1,612 Net cash provided by/(used in) investing activities — 48 (380) |
Other (Income) and Expense (Tab
Other (Income) and Expense (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Other Income and Expenses [Abstract] | |
Schedule Of Other Income And Expense | Components of other (income) and expense are as follows: ($ in millions) For the year ended December 31: 2023 2022 2021 Other (income) and expense Foreign currency transaction losses/(gains) (1) $ 116 $ (643) $ (204) (Gains)/losses on derivative instruments (1) (17) 225 205 Interest income (670) (162) (52) Net (gains)/losses from securities and investment assets (39) 278 (133) Retirement-related costs/(income) (2) (39) 6,548 1,282 Other (3) (266) (443) (225) Total other (income) and expense $ (914) $ 5,803 $ 873 (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 T, "Derivative Financial Instruments," for additional information on foreign exchange risk. (2) 2022 includes a one-time, non-cash pension settlement charge of $5.9 billion. Refer to note V, "Retirement-Related Benefits," for additional information. (3) |
Taxes (Tables)
Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income before income taxes | ($ in millions) For the year ended December 31: 2023 2022 2021 Income/(loss) from continuing operations before income taxes U.S. operations (1) $ (227) $ (6,602) $ (2,654) Non-U.S. operations 8,917 7,758 7,491 Total income from continuing operations before income taxes $ 8,690 $ 1,156 $ 4,837 (1) 2022 includes the impact of a one-time, non-cash pension settlement charge. Refer to note V, “Retirement-Related Benefits,” for additional information. |
Components of the provision for income taxes by geographic operations and taxing jurisdiction | The income from continuing operations provision for/(benefit from) income taxes by geographic operations was as follows: ($ in millions) For the year ended December 31: 2023 2022 2021 U.S. operations $ (574) $ (2,272) $ (969) Non-U.S. operations 1,750 1,645 1,093 Total continuing operations provision for/(benefit from) income taxes $ 1,176 $ (626) $ 124 The components of the income from continuing operations provision for/(benefit from) income taxes by taxing jurisdiction were as follows: ($ in millions) For the year ended December 31: 2023 2022 2021 U.S. federal Current $ 560 $ 391 $ 374 Deferred (1,371) (2,645) (1,358) $ (811) $ (2,253) $ (984) U.S. state and local Current $ 127 $ 184 $ 161 Deferred (162) (486) (370) $ (34) $ (302) $ (209) Non-U.S. Current $ 1,594 $ 1,676 $ 1,342 Deferred 428 252 (25) $ 2,022 $ 1,929 $ 1,317 Total continuing operations provision for/(benefit from) income taxes $ 1,176 $ (626) $ 124 Discontinued operations provision for/(benefit from) income taxes $ (9) $ 124 $ 714 Total provision for/(benefit from) income taxes $ 1,167 $ (503) $ 838 |
Effective income tax rate reconciliation | A reconciliation of the statutory U.S. federal tax rate to the company’s effective tax rate from continuing operations was as follows: For the year ended December 31: 2023 2022 2021 Statutory rate 21 % 21 % 21 % Tax differential on foreign income (1) (3) (29) (10) Domestic incentives (1) (5) (24) (5) State and local (1) 0 (21) (3) Other (1) 1 (1) 0 Effective rate 14 % (54) % 3 % (1) 2022 includes the impacts of the pension settlement charge on tax differential on foreign income, domestic incentives, state and local, and other of (24) points, (20) points, (21) points, and (1) point, respectively. Percentages rounded for disclosure purposes. |
Components of deferred tax assets and liabilities | Deferred Tax Assets ($ in millions) At December 31: 2023 2022 Retirement benefits $ 2,269 $ 1,954 Leases 1,055 927 Share-based and other compensation 720 608 Domestic tax loss/credit carryforwards 2,194 1,798 Deferred income 682 633 Foreign tax loss/credit carryforwards 651 845 Bad debt, inventory and warranty reserves 305 383 Depreciation 205 247 Restructuring charges 94 101 Accruals 253 215 Intangible assets 2,774 2,879 Capitalized research and development 3,524 3,012 Other 1,141 1,157 Gross deferred tax assets 15,868 14,759 Less: valuation allowance 765 770 Net deferred tax assets $ 15,103 $ 13,989 Deferred Tax Liabilities ($ in millions) At December 31: 2023 2022 Goodwill and intangible assets $ 3,054 $ 3,156 GILTI deferred taxes 2,195 2,483 Leases and right-of-use assets 1,369 1,174 Depreciation 523 505 Retirement benefits 1,443 1,609 Deferred transition costs 47 56 Undistributed foreign earnings 192 87 Other 770 955 Gross deferred tax liabilities $ 9,593 $ 10,025 |
Reconciliation of the beginning and ending amount of unrecognized tax benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits was as follows: ($ in millions) 2023 2022 2021 Balance at January 1 $ 8,728 $ 8,709 $ 8,568 Additions based on tax positions related to the current year 296 355 934 Additions for tax positions of prior years 231 174 247 Reductions for tax positions of prior years (including impacts due to a lapse of statute) (457) (470) (688) Settlements (26) (41) (352) Balance at December 31 $ 8,772 $ 8,728 $ 8,709 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Computation of basic and diluted earnings/(loss) per share | The following table presents the computation of basic and diluted earnings per share of common stock. ($ in millions except per share amounts) For the year ended December 31: 2023 2022 (1) 2021 Weighted-average number of shares on which earnings per share calculations are based Basic 911,210,319 902,664,190 895,990,771 Add—incremental shares under stock-based compensation plans 8,700,951 7,593,455 6,883,290 Add—incremental shares associated with contingently issuable shares 2,162,558 2,011,417 1,766,940 Assuming dilution 922,073,828 912,269,062 904,641,001 Income from continuing operations $ 7,514 $ 1,783 $ 4,712 Income/(loss) from discontinued operations, net of tax (12) (143) 1,030 Net income on which basic earnings per share is calculated $ 7,502 $ 1,639 $ 5,743 Income from continuing operations $ 7,514 $ 1,783 $ 4,712 Net income applicable to contingently issuable shares — — — Income from continuing operations on which diluted earnings per share is calculated $ 7,514 $ 1,783 $ 4,712 Income/(loss) from discontinued operations, net of tax, on which diluted earnings per share is calculated (12) (143) 1,030 Net income on which diluted earnings per share is calculated $ 7,502 $ 1,639 $ 5,743 Earnings/(loss) per share of common stock Assuming dilution Continuing operations $ 8.15 $ 1.95 $ 5.21 Discontinued operations (0.01) (0.16) 1.14 Total $ 8.14 $ 1.80 $ 6.35 Basic Continuing operations $ 8.25 $ 1.97 $ 5.26 Discontinued operations (0.01) (0.16) 1.15 Total $ 8.23 $ 1.82 $ 6.41 (1) Includes the impact of a one-time, non-cash pension settlement charge. Refer to note V, “Retirement-Related Benefits,” for additional information . |
Financial Assets & Liabilities
Financial Assets & Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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 December 31, 2023 and 2022. ($ in millions) Fair Value 2023 2022 At December 31: Hierarchy Level Assets (6) Liabilities (7) Assets (6) Liabilities (7) Cash equivalents (1) Time deposits and certificates of deposit (2) 2 $ 7,206 N/A $ 3,712 N/A Money market funds 1 494 N/A 306 N/A Total cash equivalents $ 7,699 N/A $ 4,018 N/A Equity investments 1 25 N/A — N/A Debt securities–current (2)(3) 2 373 N/A 852 N/A Debt securities–noncurrent (2)(4) 2,3 8 N/A 31 N/A Derivatives designated as hedging instruments Interest rate contracts 2 2 299 3 336 Foreign exchange contracts 2 131 275 184 674 Derivatives not designated as hedging instruments Foreign exchange contracts (5) 2 115 19 42 16 Equity contracts 2 93 — 49 8 Total $ 8,446 $ 593 $ 5,179 $ 1,034 (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) U.S. treasury bills and term deposits that are reported within marketable securities in the Consolidated Balance Sheet. (4) Includes immaterial activity related to private company investments reported within investments and sundry assets in the Consolidated Balance Sheet. (5) 2023 assets include $62 million related to foreign exchange call option contracts entered into in connection with the planned acquisition of StreamSets and webMethods from Software AG. Refer to note T, “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 December 31, 2023 were $304 million and $37 million, respectively, and at December 31, 2022 were $271 million and $7 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 December 31, 2023 were $294 million and $299 million, respectively, and at December 31, 2022 were $546 million and $488 million, respectively. N/A–Not applicable |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Inventory | ($ in millions) At December 31: 2023 2022 Finished goods $ 78 $ 158 Work in process and raw materials $ 1,083 $ 1,394 Total $ 1,161 $ 1,552 |
Financing Receivables (Tables)
Financing Receivables (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Receivables [Abstract] | |
Summary of the components of financing receivables | A summary of the components of the company’s financing receivables is presented as follows: ($ in millions) Client Financing Receivables Client Loan and Investment in Commercial Financing Receivables At December 31, 2023: Held for Held for 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 ($ in millions) Client Financing Receivables Client Loan and Investment in Commercial Financing Receivables At December 31, 2022: Held for Held for Sale (1) Total Financing receivables, gross $ 8,875 $ 4,023 $ 299 $ 939 $ 14,136 Unearned income (439) (351) — — (790) Unguaranteed residual value — 422 — — 422 Amortized cost $ 8,437 $ 4,094 $ 299 $ 939 $ 13,769 Allowance for credit losses (108) (60) (5) — (173) Total financing receivables, net $ 8,329 $ 4,034 $ 293 $ 939 $ 13,596 Current portion $ 5,073 $ 1,485 $ 293 $ 939 $ 7,790 Noncurrent portion $ 3,256 $ 2,549 $ — $ — $ 5,806 (1) The carrying value of the receivables classified as held for sale approximates fair value. |
Schedule of transfer of client and commercial financing assets | The following table presents the total amount of commercial financing receivables transferred. ($ in millions) For the year ended December 31: 2023 2022 Commercial financing receivables Receivables transferred during the period $ 9,248 $ 9,029 Receivables uncollected at end of period (1) $ 1,600 $ 1,561 (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 December 31, 2023 and 2022. |
Schedule of financing receivables and allowance for credit losses by class | The following tables present the amortized cost basis for client financing receivables at December 31, 2023 and 2022, 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. ($ 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 ($ in millions) At December 31, 2022: Americas EMEA Asia Pacific Total Amortized cost $ 7,281 $ 3,546 $ 1,704 $ 12,531 Allowance for credit losses Beginning balance at January 1, 2022 $ 111 $ 61 $ 23 $ 195 Write-offs (20) (3) (2) (25) Recoveries 1 0 4 5 Additions/(releases) (5) 6 (4) (3) Other (1) 2 (5) (2) (4) Ending balance at December 31, 2022 $ 88 $ 60 $ 20 $ 168 (1) Primarily represents translation adjustments. |
Schedule of past due financing receivables | ($ in millions) At December 31, 2023: Total Amortized Cost > 90 Days (1) Amortized Cost > 90 Days and Accruing (1) Billed Amortized Cost Not Accruing (2) Americas $ 6,488 $ 111 $ 40 $ 6 $ 71 EMEA 3,007 31 1 1 31 Asia Pacific 1,368 9 1 0 8 Total client financing receivables $ 10,863 $ 151 $ 43 $ 7 $ 110 ($ in millions) At December 31, 2022: Total Amortized Cost > 90 Days (1) Amortized Cost > 90 Days and Accruing (1) Billed Amortized Cost Not Accruing (2) Americas $ 7,281 $ 272 $ 198 $ 22 $ 74 EMEA 3,546 52 8 1 46 Asia Pacific 1,704 20 3 1 17 Total client financing receivables $ 12,531 $ 344 $ 208 $ 23 $ 137 (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 $106 million and $122 million at December 31, 2023 and 2022, respectively. Financing income recognized on these receivables was immaterial for the years ended December 31, 2023 and 2022. |
Schedule of amortized cost by credit quality indicator | The following tables present the amortized cost basis for client financing receivables by credit quality indicator at December 31, 2023 and 2022, respectively. Receivables with a credit quality indicator ranging from Aaa to Baa3 are considered investment grade. All others are considered non-investment grade. The credit quality indicators reflect mitigating credit enhancement actions taken by customers which reduce the risk to IBM. Gross write-offs by vintage year at December 31, 2023 were not material. ($ 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 ($ in millions) Americas EMEA Asia Pacific At December 31, 2022: Aaa - Baa3 Ba1 - C Aaa - Baa3 Ba1 - C Aaa - Baa3 Ba1 - C Vintage year 2022 $ 3,316 $ 1,097 $ 1,447 $ 704 $ 799 $ 96 2021 1,197 323 451 159 203 65 2020 559 217 258 158 210 49 2019 251 91 161 99 127 22 2018 128 26 42 16 84 21 2017 and prior 32 45 14 38 12 17 Total $ 5,482 $ 1,800 $ 2,373 $ 1,173 $ 1,434 $ 269 |
Property, Plant & Equipment (Ta
Property, Plant & Equipment (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant & equipment | ($ in millions) At December 31: 2023 2022 Land and land improvements $ 182 $ 213 Buildings and building and leasehold improvements 5,333 5,678 Information technology equipment 9,223 9,643 Production, engineering, office and other equipment 3,385 3,161 Total—gross 18,122 18,695 Less: Accumulated depreciation 12,621 13,361 Total—net $ 5,501 $ 5,334 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Schedule of various components of lease costs | The following table presents the various components of lease costs. ($ in millions) For the year ended December 31: 2023 2022 2021 Finance lease cost $ 114 $ 67 $ 52 Operating lease cost 1,013 1,050 1,126 Short-term lease cost 9 7 21 Variable lease cost 331 262 336 Sublease income (61) (72) (46) Total lease cost $ 1,406 $ 1,315 $ 1,489 |
Schedule of supplemental information relating to the cash flows arising from lease transactions | The following table presents supplemental information relating to the cash flows arising from lease transactions. Cash payments related to variable lease costs and short-term leases are not included in the measurement of operating and finance lease liabilities, and, as such, are excluded from the amounts below. ($ in millions) For the year ended December 31: 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash outflows from finance leases $ 16 $ 9 $ 8 Financing cash outflows from finance leases 75 55 42 Operating cash outflows from operating leases 961 1,020 1,135 ROU assets obtained in exchange for new finance lease liabilities (1) 355 196 46 ROU assets obtained in exchange for new operating lease liabilities (1) 1,220 705 779 (1) Includes the impact of currency. |
Schedule of weighted-average lease terms and discount rates | The following table presents the weighted-average lease term and discount rate for finance and operating leases. At December 31: 2023 2022 Finance leases Weighted-average remaining lease term (in years) 5.1 3.7 Weighted-average discount rate 4.62 % 3.57 % Operating leases Weighted-average remaining lease term (in years) 6.2 4.5 Weighted-average discount rate 4.46 % 3.77 % |
Schedule of expected undiscounted cash out flows for operating and finance leases | The following table presents a maturity analysis of expected undiscounted cash flows for operating and finance leases on an annual basis for the next five years and thereafter. ($ in millions) 2024 2025 2026 2027 2028 Thereafter Imputed Interest (1) Total (2) Finance leases $ 145 $ 126 $ 90 $ 80 $ 61 $ 78 $ (82) $ 499 Operating leases 948 761 616 452 281 890 (560) 3,389 (1) Imputed interest represents the difference between undiscounted cash flows and discounted cash flows. (2) The company entered into lease agreements for certain facilities and equipment with payments totaling approximately $247 million that have not yet commenced as of December 31, 2023, and therefore are not included in this table. |
Schedule of finance lease right of use assets and liability | The following table presents information on the company’s finance leases recognized in the Consolidated Balance Sheet. ($ in millions) At December 31: 2023 2022 ROU Assets—Property, plant and equipment $ 481 $ 223 Lease Liabilities Short-term debt 121 75 Long-term debt 379 164 |
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. ($ in millions) For the year ended December 31: 2023 2022 2021 Lease income—sales-type and direct financing leases Sales-type lease selling price $ 1,280 $ 1,636 $ 1,355 Less: Carrying value of underlying assets (1) (245) (385) (300) Gross profit 1,034 1,251 1,055 Interest income on lease receivables 242 200 179 Total sales-type and direct financing lease income 1,276 1,451 1,234 Lease income—operating leases 93 116 169 Variable lease income 68 87 120 Total lease income $ 1,437 $ 1,653 $ 1,523 (1) Excludes unguaranteed residual value. |
Schedule of maturity analysis of the lease payments due to IBM on sales-type and direct financing leases | The following table presents a maturity analysis of the lease payments due to IBM on sales-type and direct financing leases over the next five years and thereafter, as well as a reconciliation of the undiscounted cash flows to the financing receivables recognized in the Consolidated Balance Sheet at December 31, 2023. ($ in millions) Total 2024 $ 1,735 2025 1,360 2026 713 2027 353 2028 91 Thereafter 9 Total undiscounted cash flows $ 4,261 Present value of lease payments (recognized as financing receivables) (1) 3,832 Difference between undiscounted cash flows and discounted cash flows $ 429 (1) The present value of the lease payments will not equal the financing receivables balances in the Consolidated Balance Sheet due to certain items including IDCs, allowance for credit losses and residual values, which are included in the financing receivable balance, but are not included in the future lease paym |
Intangible Assets Including G_2
Intangible Assets Including Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible asset balances by major asset class | The following table presents the company’s intangible asset balances by major asset class. ($ in millions) At December 31, 2023: 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 ($ in millions) At December 31, 2022: Gross Carrying Accumulated Net Carrying Amount (1) Intangible asset class Capitalized software $ 1,650 $ (705) $ 945 Client relationships 8,559 (2,951) 5,608 Completed technology 5,220 (2,045) 3,175 Patents/trademarks 2,140 (688) 1,452 Other (2) 19 (15) 4 Total $ 17,588 $ (6,404) $ 11,184 (1) Amounts as of December 31, 2023 and December 31, 2022 include an increase in net intangible asset balance of $50 million and a decrease in net intangible asset balance of $198 million, respectively, due to foreign currency translation. (2) Other intangibles are primarily acquired proprietary and nonproprietary data, business processes, methodologies and systems. |
Intangible assets, future amortization expense | The future amortization expense relating to intangible assets currently recorded in the Consolidated Balance Sheet is estimated to be the following at December 31, 2023: ($ in millions) Capitalized Acquired Total 2024 $ 514 $ 1,743 $ 2,257 2025 260 1,713 1,973 2026 100 1,690 1,790 2027 — 1,671 1,671 2028 — 1,368 1,368 Thereafter — 1,979 1,979 |
Changes in goodwill balances by reportable segment | The changes in the goodwill balances by reportable segment for the years ended December 31, 2023 and 2022 are as follows: ($ in millions) Segment Balance at January 1, 2023 Goodwill Purchase Divestitures Foreign Currency Translation and Other Adjustments (1) Balance at December 31, 2023 Software $ 43,657 $ 3,538 $ (17) $ — $ 214 $ 47,392 Consulting 7,928 403 2 — 69 8,403 Infrastructure 4,363 12 — — 8 4,384 Other — — — — — — Total $ 55,949 $ 3,953 $ (15) $ — $ 291 $ 60,178 ($ in millions) Segment Balance at January 1, 2022 Goodwill Purchase Divestitures Foreign Currency Translation and Other Adjustments (1) Balance at December 31, 2022 Software $ 43,966 $ 568 $ (118) $ — $ (760) $ 43,657 Consulting 6,797 1,366 (42) — (192) 7,928 Infrastructure 4,396 — — (1) (32) 4,363 Other (2) 484 — — (484) — — Total $ 55,643 $ 1,934 $ (159) $ (485) $ (984) $ 55,949 (1) Primarily driven by foreign currency translation. (2) The company derecognized goodwill related to the divestiture of its healthcare software assets in the second quarter of 2022. |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Long-Term Debt, Pre-Swap Borrowing | ($ in millions) At December 31: Maturities 2023 2022 U.S. dollar debt (weighted-average interest rate at December 31, 2023): (1) 3.4% 2023 $ — $ 1,529 3.3% 2024 5,003 5,009 5.1% 2025 1,601 1,603 3.5% 2026 5,201 4,351 3.1% 2027 3,619 3,620 5.0% 2028 1,313 313 3.5% 2029 3,250 3,250 2.0% 2030 1,350 1,350 4.4% 2032 1,850 1,850 4.8% 2033 750 — 8.0% 2038 83 83 4.5% 2039 2,745 2,745 2.9% 2040 650 650 4.0% 2042 1,107 1,107 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 — 7.1% 2096 316 316 $ 35,317 $ 33,605 Euro debt (weighted-average interest rate at December 31, 2023): (1) 0.7% 2023 $ — $ 2,937 1.1% 2024 829 801 1.6% 2025 3,315 3,204 2.3% 2027 2,210 1,068 0.7% 2028 1,989 1,922 1.5% 2029 1,105 1,068 0.9% 2030 1,105 1,068 2.7% 2031 2,762 1,335 0.7% 2032 1,768 1,709 1.3% 2034 1,105 1,068 3.8% 2035 1,105 — 1.2% 2040 939 908 4.0% 2043 1,105 — $ 19,335 $ 17,087 Other currencies (weighted-average interest rate at December 31, 2023, in parentheses): (1) Pound sterling (4.9%) 2038 $ 955 $ — Japanese yen (0.5%) 2024–2028 1,251 694 Other (14.2%) 2024–2026 241 361 $ 57,099 $ 51,747 Finance lease obligations (4.5%) 2024–2034 499 239 $ 57,598 $ 51,986 Less: net unamortized discount 838 835 Less: net unamortized debt issuance costs 154 138 Add: fair value adjustment (2) (60) (73) $ 56,546 $ 50,940 Less: current maturities 6,425 4,751 Total $ 50,121 $ 46,189 (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. |
Post-Swap Borrowing (Long-Term Debt, Including Current Portion) | ($ in millions) 2023 2022 At December 31: Amount Weighted-Average Amount Weighted-Average Fixed-rate debt $ 48,803 3.0 % $ 43,898 2.7 % Floating-rate debt (1) 7,743 6.1 % 7,042 5.9 % Total $ 56,546 $ 50,940 (1) Includes $6,725 million and $6,525 million in 2023 and 2022, respectively, of notional interest-rate swaps that effectively convert fixed-rate long-term debt into floating-rate debt. Refer to note T, “Derivative Financial Instruments,” for additional information. |
Pre-swap annual contractual obligations of long-term debt outstanding | Pre-swap annual contractual obligations of long-term debt outstanding at December 31, 2023, are as follows: ($ in millions) Total 2024 $ 6,427 2025 5,090 2026 5,624 2027 5,898 2028 3,959 Thereafter 30,600 Total $ 57,598 |
Interest on Debt | ($ in millions) For the year ended December 31: 2023 2022 2021 Cost of financing $ 334 $ 346 $ 392 Interest expense 1,607 1,216 1,155 Interest capitalized 9 5 3 Total interest paid and accrued $ 1,949 $ 1,566 $ 1,550 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | ($ in millions) At December 31: 2023 2022 Income tax reserves (1) $ 6,916 $ 6,404 Deferred taxes 1,146 2,292 Excess 401(k) Plus Plan 1,437 1,307 Disability benefits 308 303 Derivative liabilities 299 488 Workforce reductions 526 524 Environmental accruals 206 243 Other (2) 639 681 Total $ 11,475 $ 12,243 (1) Refer to note H, “Taxes,” for additional information. (2) Prior-period amounts have been reclassified to conform to the change in 2023 presentation. |
Commitments & Contingencies (Ta
Commitments & Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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 ($ in millions) 2023 2022 Balance at January 1 $ 79 $ 77 Current period accruals 84 84 Accrual adjustments to reflect experience (14) (2) Charges incurred (83) (81) Balance at December 31 $ 65 $ 79 Extended Warranty Liability (Deferred Income) ($ in millions) 2023 2022 Balance at January 1 $ 272 $ 350 Revenue deferred for new extended warranty contracts 70 100 Amortization of deferred revenue (158) (163) Other (1) 0 (15) Balance at December 31 $ 184 $ 272 Current portion $ 110 $ 137 Noncurrent portion $ 74 $ 135 (1) Other consists primarily of foreign currency translation adjustments. |
Equity Activity (Tables)
Equity Activity (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Reclassifications and taxes related to items of other comprehensive income | ($ in millions) For the year ended December 31, 2023: Before Tax Tax (Expense)/ Net of Tax Other comprehensive income/(loss) Foreign currency translation adjustments $ 3 $ 100 $ 103 Net changes related to available-for-sale securities Unrealized gains/(losses) arising during the period $ 0 $ 0 $ 0 Reclassification of (gains)/losses to other (income) and expense — — — Total net changes related to available-for-sale securities $ 0 $ 0 $ 0 Unrealized gains/(losses) on cash flow hedges Unrealized gains/(losses) arising during the period $ 207 $ (63) $ 144 Reclassification of (gains)/losses to: Cost of services 5 (1) 5 Cost of sales (22) 8 (14) Cost of financing 14 (3) 10 SG&A expense (12) 4 (8) Other (income) and expense (209) 53 (157) Interest expense 66 (17) 49 Total unrealized gains/(losses) on cash flow hedges $ 47 $ (19) $ 28 Retirement-related benefit plans (1) Prior service costs/(credits) $ 2 $ 0 $ 2 Net (losses)/gains arising during the period (3,115) 536 (2,579) Curtailments and settlements 5 (1) 4 Amortization of prior service (credits)/costs (9) 3 (6) Amortization of net (gains)/losses 515 (88) 427 Total retirement-related benefit plans $ (2,602) $ 450 $ (2,152) Other comprehensive income/(loss) $ (2,552) $ 531 $ (2,021) (1) These AOCI components are included in the computation of net periodic pension cost. Refer to note V, “Retirement-Related Benefits,” for additional information. ($ in millions) For the year ended December 31, 2022: Before Tax Tax (Expense)/ Net of Tax Other comprehensive income/(loss) Foreign currency translation adjustments $ 176 $ (406) $ (229) Net changes related to available-for-sale securities Unrealized gains/(losses) arising during the period $ (1) $ 0 $ (1) Reclassification of (gains)/losses to other (income) and expense — — — Total net changes related to available-for-sale securities $ (1) $ 0 $ (1) Unrealized gains/(losses) on cash flow hedges Unrealized gains/(losses) arising during the period $ 241 $ (64) $ 178 Reclassification of (gains)/losses to: Cost of services (24) 6 (18) Cost of sales (99) 28 (70) Cost of financing 24 (6) 18 SG&A expense (38) 11 (28) Other (income) and expense (349) 88 (261) Interest expense 86 (22) 64 Total unrealized gains/(losses) on cash flow hedges $ (158) $ 41 $ (117) Retirement-related benefit plans (1) Prior service costs/(credits) $ 463 $ (99) $ 364 Net (losses)/gains arising during the period 878 (183) 695 Curtailments and settlements 5,970 (1,490) 4,480 Amortization of prior service (credits)/costs 12 (3) 9 Amortization of net (gains)/losses 1,596 (304) 1,293 Total retirement-related benefit plans $ 8,919 $ (2,078) $ 6,841 Other comprehensive income/(loss) $ 8,936 $ (2,442) $ 6,494 (1) These AOCI components are included in the computation of net periodic pension cost and include the impact of a one-time, non-cash pension settlement charge of $5.9 billion ($4.4 billion net of tax). Refer to note V, “Retirement-Related Benefits,” for additional information. ($ in millions) For the year ended December 31, 2021: Before Tax Tax (Expense)/ Net of Tax Other comprehensive income/(loss) Foreign currency translation adjustments $ 987 $ (414) $ 573 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 $ 344 $ (89) $ 256 Reclassification of (gains)/losses to: Cost of services (43) 11 (32) Cost of sales 16 (3) 13 Cost of financing 22 (6) 17 SG&A expense 24 (6) 19 Other (income) and expense 157 (40) 118 Interest expense 65 (16) 49 Total unrealized gains/(losses) on cash flow hedges $ 587 $ (149) $ 438 Retirement-related benefit plans (1) Prior service costs/(credits) $ (51) $ (1) $ (52) Net (losses)/gains arising during the period 2,433 (601) 1,832 Curtailments and settlements 94 (11) 83 Amortization of prior service (credits)/costs 9 0 9 Amortization of net (gains)/losses 2,484 (528) 1,956 Total retirement-related benefit plans $ 4,969 $ (1,140) $ 3,828 Other comprehensive income/(loss) $ 6,542 $ (1,703) $ 4,839 (1) These AOCI components are included in the computation of net periodic pension cost. Refer to note V, “Retirement-Related Benefits,” for additional information. |
Accumulated other comprehensive income/(loss) (net of tax) | ($ in millions) Net Unrealized Foreign Currency Translation Adjustments (1) Net Change Net Unrealized Accumulated December 31, 2020 $ (456) $ (4,665) $ (24,216) $ 0 $ (29,337) Other comprehensive income before reclassifications 256 573 1,780 0 2,608 Amount reclassified from accumulated other comprehensive income 183 — 2,049 — 2,231 Separation of Kyndryl — 730 534 — 1,264 Total change for the period 438 1,303 4,362 0 6,103 December 31, 2021 (18) (3,362) (19,854) (1) (23,234) Other comprehensive income before reclassifications 178 (229) 1,059 (1) 1,007 Amount reclassified from accumulated other comprehensive income (2) (295) — 5,782 — 5,487 Total change for the period (117) (229) 6,841 (1) 6,494 December 31, 2022 (135) (3,591) (13,013) (1) (16,740) Other comprehensive income before reclassifications 144 103 (2,577) 0 (2,331) Amount reclassified from accumulated other comprehensive income (115) — 425 — 310 Total change for the period 28 103 (2,152) 0 (2,021) December 31, 2023 $ (106) $ (3,488) $ (15,165) $ (1) $ (18,761) (1) Foreign currency translation adjustments are presented gross except for any associated hedges which are presented net of tax. (2) Net change in retirement-related benefit plans includes the impact of a one-time, non-cash pension settlement charge of $5.9 billion ($4.4 billion net of tax). Refer to note V, “Retirement-Related Benefits,” for additional information. |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Amounts related to cumulative basis adjustments for fair value hedges | At December 31, 2023 and 2022, the following amounts were recorded in the Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges: ($ in millions) At December 31: 2023 2022 Short-term debt Carrying amount of the hedged item $ (1) $ (199) Cumulative hedging adjustments included in the carrying amount—assets/(liabilities) (1) 1 L ong-term debt Carrying amount of the hedged item (6,629) (6,216) Cumulative hedging adjustments included in the carrying amount—assets/(liabilities) (1) 61 72 (1) Includes ($200) million and ($250) million of hedging adjustments on discontinued hedging relationships at December 31, 2023 and 2022, respectively. |
Effect of derivative instruments in the Consolidated Income Statement | The total amounts of income and expense line items presented in the Consolidated Income Statement in which the effects of fair value hedges, cash flow hedges, net investment hedges and derivatives not designated as hedging instruments are recorded and the total effect of hedge activity on these income and expense line items are as follows: ($ in millions) Total Gains/(Losses) of For the year ended December 31: 2023 2022 2021 2023 2022 2021 Cost of services $ 21,051 $ 21,062 $ 19,147 $ (5) $ 24 $ 43 Cost of sales 6,127 6,374 6,184 22 99 (16) Cost of financing 382 406 534 (11) 2 1 SG&A expense 19,003 18,609 18,745 165 (211) 176 Other (income) and expense (914) 5,803 873 17 (225) (205) Interest expense 1,607 1,216 1,155 (54) 6 3 ($ in millions) Gain/(Loss) Recognized in Consolidated Income Statement Consolidated Recognized on Attributable to Risk Being Hedged (2) For the year ended December 31: 2023 2022 2021 2023 2022 2021 Derivative instruments in fair value hedges (1) Interest rate contracts Cost of $ (17) $ (73) $ (1) $ (2) $ 85 $ 18 Interest (83) (257) (2) (11) 299 53 Derivative instruments not designated as hedging instruments Foreign exchange contracts Other (income) (192) (492) (48) N/A N/A N/A Equity contracts SG&A expense 153 (249) 201 N/A N/A N/A Other (income) — (83) — N/A N/A N/A Total $ (140) $ (1,153) $ 150 $ (13) $ 384 $ 71 ($ in millions) Gain/(Loss) Recognized in Consolidated Income Statement and Other Comprehensive Income For the year ended Recognized in OCI Consolidated Reclassified Amounts Excluded from Effectiveness Testing (3) December 31: 2023 2022 2021 2023 2022 2021 2023 2022 2021 Derivative instruments in cash flow hedges Interest rate contracts $ — $ — $ — Cost of financing $ (3) $ (4) $ (4) $ — $ — $ — Interest (15) (14) (13) — — — Foreign exchange contracts Cost of services (5) 24 43 — — — Amount included in the assessment of effectiveness 213 241 344 Cost of sales 22 99 (16) — — — Amount excluded from the assessment of effectiveness (6) — — Cost of financing (11) (21) (18) — — — SG&A expense 12 38 (24) — — — Other (income) and expense 239 349 (157) (29) — — Interest (51) (72) (52) — — — Instruments in net investment hedges (4) Foreign exchange contracts (397) 1,613 1,644 Cost of financing — — — 22 14 6 Interest — — — 105 50 17 Total $ (190) $ 1,854 $ 1,989 $ 189 $ 400 $ (243) $ 98 $ 64 $ 23 (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 in net income each period. (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) | 12 Months Ended |
Dec. 31, 2023 | |
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. ($ in millions) For the year ended December 31: 2023 2022 2021 Cost $ 190 $ 164 $ 145 SG&A expense 616 566 555 RD&E expense 328 258 218 Pre-tax stock-based compensation cost 1,133 987 919 Income tax benefits (290) (249) (223) Net stock-based compensation cost $ 843 $ 738 $ 695 |
Summary of Restricted Stock Units activity | The following table summarizes RSU and PSU activity under the Plans during the years ended December 31, 2023, 2022 and 2021. RSUs PSUs Weighted-Average Number of Units Weighted-Average Number of Units (1) Balance at January 1, 2021 $ 117 16,896,704 $ 120 3,551,500 Awards granted 125 9,566,307 129 1,561,120 Awards released 120 (4,582,159) 129 (581,397) Awards canceled/forfeited/performance adjusted (2) 119 (2,072,800) 124 (453,178) Kyndryl separation - adjustment — 660,089 — 120,428 Kyndryl separation - cancellation 119 (1,429,661) 119 (469,616) Balance at December 31, 2021 $ 116 19,038,480 $ 118 3,728,857 Awards granted 112 11,447,966 110 1,237,019 Awards released 114 (7,013,530) 114 (679,601) Awards canceled/forfeited/performance adjusted (2) 116 (2,420,002) 116 (720,197) Balance at December 31, 2022 $ 115 21,052,914 $ 117 3,566,078 Awards granted 118 10,915,958 117 1,295,937 Awards released 114 (7,383,980) 113 (840,111) Awards canceled/forfeited/performance adjusted (2) 115 (1,527,249) 114 (548,865) Balance at December 31, 2023 $ 116 23,057,643 $ 118 3,473,039 (1) The balances at December 31 for each period presented represent the number of shares expected to be issued based on achievement of grant date performance targets. The actual number of shares issued will depend on final performance against specified targets over the vesting period. (2) Includes adjustments of (404,655), (362,247) and (223,397) for PSUs in 2023, 2022 and 2021, respectively, because final performance metrics were above or below specified targets. |
Summary of Performance Share Units activity | The following table summarizes RSU and PSU activity under the Plans during the years ended December 31, 2023, 2022 and 2021. RSUs PSUs Weighted-Average Number of Units Weighted-Average Number of Units (1) Balance at January 1, 2021 $ 117 16,896,704 $ 120 3,551,500 Awards granted 125 9,566,307 129 1,561,120 Awards released 120 (4,582,159) 129 (581,397) Awards canceled/forfeited/performance adjusted (2) 119 (2,072,800) 124 (453,178) Kyndryl separation - adjustment — 660,089 — 120,428 Kyndryl separation - cancellation 119 (1,429,661) 119 (469,616) Balance at December 31, 2021 $ 116 19,038,480 $ 118 3,728,857 Awards granted 112 11,447,966 110 1,237,019 Awards released 114 (7,013,530) 114 (679,601) Awards canceled/forfeited/performance adjusted (2) 116 (2,420,002) 116 (720,197) Balance at December 31, 2022 $ 115 21,052,914 $ 117 3,566,078 Awards granted 118 10,915,958 117 1,295,937 Awards released 114 (7,383,980) 113 (840,111) Awards canceled/forfeited/performance adjusted (2) 115 (1,527,249) 114 (548,865) Balance at December 31, 2023 $ 116 23,057,643 $ 118 3,473,039 (1) The balances at December 31 for each period presented represent the number of shares expected to be issued based on achievement of grant date performance targets. The actual number of shares issued will depend on final performance against specified targets over the vesting period. (2) Includes adjustments of (404,655), (362,247) and (223,397) for PSUs in 2023, 2022 and 2021, respectively, because final performance metrics were above or below specified targets. |
Summary of total fair value of RSUs and PSUs granted and vested | The total fair value of RSUs and PSUs granted and vested during the years ended December 31, 2023, 2022 and 2021 were as follows: ($ in millions) For the year ended December 31: 2023 2022 2021 RSUs Granted $ 1,293 $ 1,288 $ 1,195 Vested 845 801 549 PSUs Granted $ 151 $ 136 $ 201 Vested 95 77 75 |
Schedule of weighted-average assumptions used for estimation of fair value of stock options | The fair value was estimated based on the following weighted-average assumptions: For the year ended December 31: 2023 2022 Expected term (in years) 6.3 6.3 Expected volatility 26.0 % 25.5 % Risk-free rate 4.2 % 2.0 % Dividend yield 5.0 % 5.3 % |
Summary of option activity | The following table summarizes option activity under the Plans during the years ended December 31, 2023 and 2022. Weighted-Average Number of Shares Balance at January 1, 2022 $ 135 1,549,732 Options granted 125 5,044,353 Options exercised — — Options forfeited/cancelled/expired 125 (319,560) Balance at December 31, 2022 $ 128 6,274,525 Options granted 133 4,574,756 Options exercised 125 (408,045) Options forfeited/cancelled/expired 129 (584,674) Balance at December 31, 2023 $ 130 9,856,562 Vested and exercisable at December 31, 2023 $ 132 2,297,818 |
Retirement-Related Benefits (Ta
Retirement-Related Benefits (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
Description of plans | IBM sponsors the following retirement-related plans/benefits: Plan Eligibility Funding Benefit Calculation Other U.S. Defined Benefit (DB) Pension Plans Qualified Personal Pension Plan (Qualified PPP) (1) U.S. regular, full-time and part-time employees hired prior to January 1, 2005 Company contributes to irrevocable trust fund, held for sole benefit of participants and beneficiaries Vary based on the participant: five Cash balance formula based on percentage of employees’ annual salary, as well as an interest crediting rate Benefit accruals ceased December 31, 2007 (1) . Certain defined benefit pension obligations and related plan assets were transferred in 2022, as described below Excess Personal Pension Plan (Excess PPP) Unfunded, provides benefits in excess of IRS limitations for qualified plans Supplemental Executive Retention Plan (Retention Plan) Eligible U.S. executives Unfunded Based on average earnings, years of service and age at termination of employment U.S. Defined Contribution (DC) Plans 401(k) Plus (1) U.S. regular, full-time and part-time employees All contributions are made in cash and invested in accordance with participants’ investment elections Dollar-for-dollar match, generally 5 or 6 percent of eligible compensation and automatic contribution of 1, 2 or 4 percent of eligible compensation, depending on date of hire Employees generally receive contributions after one year of service Excess 401(k) Plus (2) U.S. employees whose eligible compensation is expected to exceed IRS compensation limit for qualified plans Unfunded, non-qualified amounts deferred are record-keeping (notional) accounts and are not held in trust for the participants, but may be invested in accordance with participants’ investment elections (under the 401(k) Plus Plan options) Company match and automatic contributions (at the same rate under 401(k) Plus Plan) on eligible compensation deferred and on compensation earned in excess of the IRC pay limit. The percentage varies depending on eligibility and years of service Employees generally receive contributions after one year of service. Amounts deferred into the Plan, including company contributions, are recorded as liabilities U.S. Nonpension Postretirement Benefit Plan Nonpension Postretirement Plan Medical and dental benefits for eligible U.S. retirees and eligible dependents, as well as life insurance for eligible U.S. retirees Company contributes to irrevocable trust fund, held for the sole benefit of participants and beneficiaries Varies based on plan design formulas and eligibility requirements Since January 1, 2004, new hires are not eligible for these benefits Non-U.S. Plans DB or DC Eligible regular employees in certain non-U.S. subsidiaries or branches Company deposits funds under various fiduciary-type arrangements, purchases annuities under group contracts or provides reserves for these plans Based either on years of service and the employee’s compensation (generally during a fixed number of years immediately before retirement) or on annual credits In certain countries, benefit accruals have ceased and/or have been closed to new hires as of various dates Nonpension Postretirement Plan Medical and dental benefits for eligible non-U.S. retirees and eligible dependents, as well as life insurance for certain eligible non-U.S. retirees Primarily unfunded except for a few select countries where the company contributes to irrevocable trust funds held for the sole benefit of participants and beneficiaries Varies based on plan design formulas and eligibility requirements by country Most non-U.S. retirees are covered by local government sponsored and administered programs (1) Beginning January 1, 2024, the company changed how it will provide retirement benefits to certain U.S. eligible employees. Refer to IBM U.S. Retirement Plan Changes section below for additional information. (2) Beginning January 1, 2024, the company's match contribution on eligible compensation deferred and earned will be 5 percent for all eligible employees . |
Pre-tax cost for all retirement-related plans | The following table presents a summary of the total retirement-related benefits net periodic (income)/cost recorded in the Consolidated Income Statement. ($ in millions) U.S. Plans Non-U.S. Plans Total For the year ended December 31: 2023 2022 2021 2023 2022 2021 2023 2022 2021 Total defined benefit pension plans (income)/cost (1) $ (329) $ 5,857 $ 319 $ 359 $ 836 $ 1,119 $ 30 $ 6,693 $ 1,438 Total defined contribution plans cost $ 615 $ 555 $ 582 $ 376 $ 369 $ 409 $ 991 $ 924 $ 992 Nonpension postretirement benefit plans cost $ 92 $ 85 $ 127 $ 36 $ 30 $ 44 $ 128 $ 115 $ 172 Total retirement-related benefits net periodic cost (1) $ 378 $ 6,497 $ 1,029 $ 771 $ 1,235 $ 1,573 $ 1,149 $ 7,732 $ 2,601 |
Summary of the total PBO for defined benefit plans, APBO for nonpension postretirement benefit plans, fair value of plan assets and associated funded status | The following table presents a summary of the total PBO for defined benefit pension plans, APBO for nonpension postretirement benefit plans, fair value of plan assets and the associated funded status recorded in the Consolidated Balance Sheet. ($ in millions) Benefit Obligations Fair Value of Plan Assets Funded Status (1) At December 31: 2023 2022 2023 2022 2023 2022 U.S. Plans Overfunded plans Qualified PPP $ 19,854 $ 20,091 $ 24,437 $ 25,094 $ 4,584 $ 5,002 Underfunded plans Nonqualified defined benefit pension plans (2) 1,382 1,402 — — (1,382) (1,402) Nonpension postretirement benefit plan 2,233 2,369 10 10 (2,224) (2,359) Total underfunded U.S. plans $ 3,615 $ 3,771 $ 10 $ 10 $ (3,605) $ (3,761) Non-U.S. Plans Overfunded plans Qualified defined benefit pension plans (3) $ 16,515 $ 15,443 $ 19,438 $ 18,677 $ 2,923 $ 3,234 Nonpension postretirement benefit plans — 7 — 7 — 0 Total overfunded non-U.S. plans $ 16,515 $ 15,450 $ 19,438 $ 18,684 $ 2,923 $ 3,234 Underfunded plans Qualified defined benefit pension plans (3) $ 11,946 $ 11,361 $ 9,621 $ 9,694 $ (2,325) $ (1,667) Nonqualified defined benefit pension plans (3) 5,018 4,457 — — (5,018) (4,457) Nonpension postretirement benefit plans 586 524 23 22 (564) (502) Total underfunded non-U.S. plans $ 17,550 $ 16,342 $ 9,643 $ 9,716 $ (7,907) $ (6,626) Total overfunded plans $ 36,369 $ 35,541 $ 43,875 $ 43,778 $ 7,506 $ 8,236 Total underfunded plans $ 21,165 $ 20,113 $ 9,653 $ 9,726 $ (11,512) $ (10,387) (1) Funded status is recognized in the Consolidated Balance Sheet as follows: Asset amounts as prepaid pension assets; (Liability) amounts as compensation and benefits (current liability) and retirement and nonpension postretirement benefit obligations (noncurrent liability). (2) Excess PPP and Retention Plan. (3) Non-U.S. qualified plans represent plans funded outside of the U.S. Non-U.S. nonqualified plans are unfunded. |
Components of net periodic (income)/cost of the company's retirement-related benefit plans | The following tables present the components of net periodic (income)/cost of the retirement-related benefit plans recognized in the Consolidated Income Statement, excluding defined contribution plans. ($ in millions) Defined Benefit Pension Plans U.S. Plans Non-U.S. Plans For the year ended December 31: 2023 2022 2021 2023 2022 2021 Service cost $ — $ — $ — $ 177 $ 237 $ 300 Interest cost (1) 1,090 1,129 1,109 1,170 493 424 Expected return on plan assets (1) (1,529) (1,729) (1,802) (1,440) (1,016) (1,115) Amortization of prior service costs/(credits) (1) 0 8 16 20 14 (12) Recognized actuarial losses (1) 109 527 996 400 1,031 1,392 Curtailments and settlements (1) (2) — 5,923 — 7 47 94 Multi-employer plans — — — 13 15 17 Other costs/(credits) (1) — — — 13 15 18 Total net periodic (income)/cost (2) $ (329) $ 5,857 $ 319 $ 359 $ 836 $ 1,119 ($ in millions) Nonpension Postretirement Benefit Plans U.S. Plan Non-U.S. Plans For the year ended December 31: 2023 2022 2021 2023 2022 2021 Service cost $ 4 $ 5 $ 7 $ 2 $ 3 $ 4 Interest cost (1) 117 85 65 39 24 27 Expected return on plan assets (1) — — — (2) (2) (3) Amortization of prior service costs/(credits) (1) (29) (10) 4 0 0 0 Recognized actuarial losses (1) — 5 52 (1) 4 15 Curtailments and settlements (1) — — — (2) 0 0 Other costs/(credits) (1) — — — 0 0 0 Total net periodic cost $ 92 $ 85 $ 127 $ 36 $ 30 $ 44 (1) These components of net periodic pension costs are included in other (income) and expense in the Consolidated Income Statement. (2) 2022 includes the impact of a one-time, non-cash, pre-tax pension settlement charge of $5.9 billion related to the Qualified PPP, as described below. |
Changes in plan assets | The following table presents the changes in benefit obligations and plan assets of the company’s retirement-related benefit plans, excluding DC plans. ($ in millions) Defined Benefit Pension Plans Nonpension Postretirement Benefit Plans U.S. Plans Non-U.S. Plans U.S. Plan Non-U.S. Plans 2023 2022 2023 2022 2023 2022 2023 2022 Change in benefit obligation Benefit obligation at January 1 $ 21,493 $ 48,182 $ 31,261 $ 45,097 $ 2,369 $ 3,404 $ 531 $ 638 Service cost — — 177 237 4 5 2 3 Interest cost 1,090 1,129 1,170 493 117 85 39 24 Plan participants' contributions — — 17 14 38 43 — — Acquisitions/divestitures, net — — (20) (45) — — — — Actuarial losses/(gains) 486 (7,849) 2,077 (8,819) (19) (780) 35 (87) Benefits paid from trust (1,424) (3,133) (1,629) (1,572) (274) (385) (7) (6) Direct benefit payments (122) (123) (396) (418) (3) (2) (31) (32) Foreign exchange impact — — 1,021 (3,463) — — 22 (10) Amendments/curtailments/ settlements/other (1) (288) (16,712) (198) (262) — 0 (4) (1) Benefit obligation at December 31 $ 21,235 $ 21,493 $ 33,479 $ 31,261 $ 2,233 $ 2,369 $ 586 $ 531 Change in plan assets Fair value of plan assets at January 1 $ 25,094 $ 51,852 $ 28,371 $ 39,979 $ 10 $ 8 $ 29 $ 31 Actual return on plan assets 1,055 (6,914) 1,391 (6,737) — — 3 3 Employer contributions — — 57 103 233 344 — — Acquisitions/divestitures, net — — (24) (20) — — — — Plan participants' contributions — — 17 14 38 43 — — Benefits paid from trust (1,424) (3,133) (1,629) (1,572) (274) (385) (7) (6) Foreign exchange impact — — 1,058 (3,154) — — 3 2 Amendments/curtailments/ settlements/other (1) (288) (16,712) (181) (243) 2 0 (6) 0 Fair value of plan assets at December 31 $ 24,437 $ 25,094 $ 29,059 $ 28,371 $ 10 $ 10 $ 23 $ 29 Funded status at December 31 $ 3,202 $ 3,600 $ (4,420) $ (2,891) $ (2,224) $ (2,359) $ (564) $ (501) Accumulated benefit obligation (2) $ 21,235 $ 21,493 $ 33,128 $ 30,961 N/A N/A N/A N/A (1) 2022 amount related to U.S. Defined Benefit Pension Plans primarily represents the transfer of Qualified PPP pension obligations and related plan assets to the Insurers pursuant to group annuity contracts. (2) Represents the benefit obligation assuming no future participant compensation increases. N/A–Not applicable |
Net funded status | The following table presents the net funded status recognized in the Consolidated Balance Sheet. ($ in millions) Defined Benefit Pension Plans Nonpension Postretirement Benefit Plans U.S. Plans Non-U.S. Plans U.S. Plan Non-U.S. Plans At December 31: 2023 2022 2023 2022 2023 2022 2023 2022 Prepaid pension assets $ 4,584 $ 5,002 $ 2,923 $ 3,234 $ 0 $ 0 $ 0 $ 0 Current liabilities—compensation and benefits (119) (121) (366) (347) (202) (307) (17) (16) Noncurrent liabilities—retirement and nonpension postretirement benefit obligations (1,262) (1,281) (6,977) (5,777) (2,022) (2,052) (547) (486) Funded status—net $ 3,202 $ 3,600 $ (4,420) $ (2,891) $ (2,224) $ (2,359) $ (564) $ (501) |
Pre-tax net loss and prior service costs/(credits) and transition (assets)/liabilities recognized in OCI and changes in pre-tax net loss, prior service costs/(credits) and transition (assets)/liabilities recognized in AOCI | The following table presents the pre-tax net loss, prior service costs/(credits) and transition (assets)/liabilities recognized in OCI and the changes in the pre-tax net loss, prior service costs/(credits) and transition (assets)/liabilities recognized in AOCI for the retirement-related benefit plans. ($ in millions) Defined Benefit Pension Plans Nonpension Postretirement Benefit Plans U.S. Plans Non-U.S. Plans U.S. Plan Non-U.S. Plans 2023 2022 2023 2022 2023 2022 2023 2022 Net loss at January 1 $ 8,617 $ 14,273 $ 11,219 $ 13,412 $ 94 $ 464 $ 86 $ 183 Current period loss/(gain) 959 794 2,125 (1,115) (20) (365) 34 (93) Curtailments and settlements (1) — (5,923) (7) (47) — — 2 0 Amortization of net loss included in net periodic (income)/cost (109) (527) (400) (1,031) — (5) 1 (4) Net loss at December 31 $ 9,467 $ 8,617 $ 12,937 $ 11,219 $ 73 $ 94 $ 123 $ 86 Prior service costs/(credits) at January 1 $ 0 $ 8 $ 330 $ 397 $ (379) $ 26 $ 0 $ (4) Current period prior service costs/(credits) — — (1) (53) — (415) (1) 5 Curtailments, settlements and other — — — — — — — — Amortization of prior service (costs)/credits included in net periodic (income)/cost 0 (8) (20) (14) 29 10 0 0 Prior service costs/(credits) at December 31 $ 0 $ 0 $ 309 $ 330 $ (350) $ (379) $ (1) $ 0 Transition (assets)/liabilities at January 1 $ — $ — $ 0 $ 0 $ — $ — $ 0 $ 0 Transition (assets)/liabilities at December 31 $ — $ — $ 0 $ 0 $ — $ — $ 0 $ 0 Total loss recognized in accumulated other comprehensive income/(loss) (2) $ 9,467 $ 8,617 $ 13,245 $ 11,549 $ (276) $ (285) $ 122 $ 86 (1) 2022 amount related to U.S. Defined Benefit Pension Plans includes the impact of a one-time, non-cash, pre-tax pension settlement charge of $5.9 billion related to the Qualified PPP, as described above. (2) Refer to note S, “Equity Activity,” for the total change in AOCI, and the Consolidated Statement of Comprehensive Income for the components of net periodic (income)/cost, including the related tax effects, recognized in OCI for the retirement-related benefit plans. |
Assumptions used to measure the net periodic (income)/cost and year-end benefit obligations | The following tables present the assumptions used to measure the net periodic (income)/cost and the year-end benefit obligations for retirement-related benefit plans. Defined Benefit Pension Plans U.S. Plans Non-U.S. Plans 2023 2022 2021 2023 2022 2021 Weighted-average assumptions used to measure net periodic (income)/cost for the year ended December 31 Discount rate (1) 5.30 % 3.30 % 2.20 % 3.80 % 1.26 % 0.87 % Expected long-term returns on plan assets (1) 5.50 % 4.33 % 3.75 % 4.44 % 2.97 % 2.85 % Rate of compensation increase N/A N/A N/A 4.00 % 3.02 % 2.59 % Interest crediting rate (1) 4.40 % 2.07 % 1.10 % 0.34 % 0.26 % 0.26 % Weighted-average assumptions used to measure benefit obligations at December 31 Discount rate 5.00 % 5.30 % 2.60 % 3.36 % 3.80 % 1.26 % Rate of compensation increase 5.00 % N/A N/A 4.18 % 4.00 % 3.02 % Interest crediting rate 3.80 % 4.40 % 1.10 % 0.28 % 0.34 % 0.26 % (1) The U.S. Plans Qualified PPP discount rate, expected long-term return on plan assets and interest crediting rate of 2.60 percent, 4.00 percent and 1.10 percent, respectively, for the period January 1, 2022 through August 31, 2022, changed to 4.70 percent, 5.00 percent and 4.00 percent, respectively, for the period September 1, 2022 through December 31, 2022 due to remeasurement of the plan as a result of the changes described on page 109 N/A–Not applicable Nonpension Postretirement Benefit Plans U.S. Plan Non-U.S. Plans 2023 2022 2021 2023 2022 2021 Weighted-average assumptions used to measure net periodic cost for the year ended December 31 Discount rate (1) 5.30 % 3.05 % 1.80 % 7.25 % 5.35 % 4.55 % Expected long-term returns on plan assets N/A N/A N/A 8.05 % 6.64 % 6.62 % Interest crediting rate (1) 4.40 % 2.16 % 1.10 % N/A N/A N/A Weighted-average assumptions used to measure benefit obligations at December 31 Discount rate 5.00 % 5.30 % 2.30 % 7.66 % 7.25 % 5.35 % Interest crediting rate 3.80 % 4.40 % 1.10 % N/A N/A N/A (1) The U.S. Nonpension Postretirement Plan discount rate and interest crediting rate of 2.30 percent and 1.10 percent, respectively, for the period January 1, 2022 through July 31, 2022, changed to 4.10 percent and 3.65 percent, respectively, for the period August 1, 2022 through December 31, 2022 due to remeasurement of the plan as a result of the changes described on page 109 N/A–Not applicable Item Description of Assumptions Discount Rate Changes in discount rate assumptions impact net periodic (income)/cost and the PBO. For the U.S. and certain non-U.S. countries, a portfolio of high-quality corporate bonds is used to construct a yield curve. Cash flows from the company’s expected benefit obligation payments are matched to the yield curve to derive the discount rates. In other non-U.S. countries where the markets for high-quality long-term bonds are not as well developed, a portfolio of long-term government bonds is used as a base, and a credit spread is added to simulate corporate bond yields at these maturities in the jurisdiction of each plan. This is the benchmark for developing the respective discount rates. Expected Long-Term Returns on Plan Assets Represents the expected long-term returns on plan assets based on the calculated market-related value of plan assets and considers long-term expectations for future returns and the investment policies and strategies discussed on pages 114 115 The use of expected returns may result in pension income that is greater or less than the actual return of those plan assets in a given year. Over time, however, the expected long-term returns are designed to approximate the actual long-term returns, and therefore result in a pattern of income or loss recognition that more closely matches the pattern of the services provided by the employees. The difference between actual and expected returns is recognized as a component of net loss or gain in AOCI, which is amortized as a component of net periodic (income)/cost over the service lives or life expectancy of the plan participants, depending on the plan, provided such amounts exceed certain thresholds provided by accounting standards. The market-related value of plan assets recognizes changes in the fair value of plan assets systematically over a five The projected long-term rate of return on plan assets for 2024 is 5.00 percent for U.S. and 4.90 percent for non-U.S. DB Plans. Rate of Compensation Increases and Mortality Assumptions Compensation rate increases are determined based on the company’s long-term plans for such increases. Mortality assumptions are based on life expectancy and death rates for different types of participants and are periodically updated based on actual experience. Interest Crediting Rate Benefits for participants in Cash Balance Plans are calculated using a cash balance formula. An assumption underlying this formula is an interest crediting rate, which impacts both net periodic (income)/cost and the PBO. This provides the basis for projecting the expected interest rate that plan participants will earn on the benefits that they are expected to receive in the following year. Healthcare Cost Trend Rate For nonpension postretirement benefit plans, the company determines healthcare cost trend rates based on medical cost inflation expectations in each market and IBM’s plan characteristics. The healthcare cost trend rate is an important consideration when setting future expectations for plan costs or benefit obligations, taking into account the terms of the plan which limit the company’s future obligations to the participants. The company’s U.S. healthcare cost trend rate assumption for 2024 is 6.69 percent and is expected to decrease to 4.50 percent over approximately 14 years. |
Defined benefit pension plans' asset classes and their associated fair value | The following table presents the company’s defined benefit pension plans’ asset classes and their associated fair value at December 31, 2023. The U.S. Plan consists of the Qualified PPP and the non-U.S. Plans consist of all plans sponsored by the company’s subsidiaries. ($ in millions) U.S. Plan Non-U.S. Plans Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Equity Equity securities (1) $ 631 $ — $ — $ 631 $ 243 $ — $ — $ 243 Equity mutual funds (2) 155 — — 155 5 — — 5 Fixed income Government and related (3) — 9,861 — 9,861 — 7,700 — 7,700 Corporate bonds (4) — 7,074 709 7,783 — 2,691 — 2,691 Mortgage and asset-backed securities — 178 — 178 — 9 — 9 Fixed income mutual funds (5) 251 — — 251 — — 75 75 Insurance contracts (6) — — — — — 3,774 — 3,774 Cash and short-term investments (7) 495 119 — 614 264 315 — 579 Private equity — — 13 13 — — — — Real estate — — — — — — 4 4 Derivatives (8) — — — — 51 258 — 309 Other mutual funds (9) — — — — 20 — — 20 Subtotal 1,532 17,231 722 19,485 584 14,747 78 15,409 Investments measured at net asset value using the NAV practical expedient (10) — — — 4,952 — — — 13,709 Other (11) — — — 0 — — — (59) Fair value of plan assets $ 1,532 $ 17,231 $ 722 $ 24,437 $ 584 $ 14,747 $ 78 $ 29,059 (1) Represents U.S. and international securities. The U.S. Plan includes IBM common stock of $1 million. Non-U.S. Plans include IBM common stock of $2 million. (2) Invests in predominantly equity securities. (3) Includes debt issued by national, state and local governments and agencies. (4) The U.S. Plans include IBM corporate bonds of $16 million. Non-U.S. Plans include IBM corporate bonds of $5 million. (5) Invests predominantly in fixed-income securities. (6) Primarily represents insurance policy contracts (Buy-In) in certain non-U.S. plans. (7) Includes cash, cash equivalents and short-term marketable securities. (8) Includes interest-rate derivatives, forwards, exchange-traded and other over-the-counter derivatives. (9) Invests in both equity and fixed-income securities. (10) Investments measured at fair value using the net asset value (NAV) per share (or its equivalent) as a practical expedient, including commingled funds, hedge funds, private equity and real estate partnerships. (11) Represents net unsettled transactions, relating primarily to purchases and sales of plan assets. The U.S. nonpension postretirement benefit plan assets of $10 million were invested primarily in cash equivalents, categorized as Level 1 in the fair value hierarchy. The non-U.S. nonpension postretirement benefit plan assets of $23 million, primarily in Brazil, and, to a lesser extent, in Mexico and South Africa, were invested primarily in government and related fixed-income securities and corporate bonds, categorized as Level 2 in the fair value hierarchy. The following table presents the company’s defined benefit pension plans’ asset classes and their associated fair value at December 31, 2022. The U.S. Plan consists of the Qualified PPP and the non-U.S. Plans consist of all plans sponsored by the company’s subsidiaries. ($ in millions) U.S. Plan Non-U.S. Plans Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Equity Equity securities (1) $ 518 $ — $ — $ 518 $ 247 $ — $ — $ 247 Equity mutual funds (2) 114 — — 114 0 — — 0 Fixed income Government and related (3) — 9,074 — 9,074 — 6,837 — 6,837 Corporate bonds (4) — 6,885 721 7,606 — 2,546 — 2,546 Mortgage and asset-backed securities — 238 — 238 — 2 — 2 Fixed income mutual funds (5) 234 — — 234 — — 9 9 Insurance contracts (6) — — — — — 3,654 — 3,654 Cash and short-term investments (7) 72 570 — 643 286 263 — 549 Private equity — — 421 421 — — — — Real estate — 8 — 8 — — 145 145 Derivatives (8) — — — — 32 262 — 294 Other mutual funds (9) — — — — 25 — — 25 Subtotal 937 16,776 1,142 18,855 590 13,563 155 14,308 Investments measured at net asset value using the NAV practical expedient (10) — — — 6,242 14,141 Other (11) — — — (4) — — — (78) Fair value of plan assets $ 937 $ 16,776 $ 1,142 $ 25,094 $ 590 $ 13,563 $ 155 $ 28,371 (1) Represents U.S. and international securities. The U.S. Plan includes IBM common stock of $1 million. Non-U.S. Plans include IBM common stock of $2 million. (2) Invests in predominantly equity securities. (3) Includes debt issued by national, state and local governments and agencies. (4) The U.S. Plans include IBM corporate bonds of $6 million. Non-U.S. Plans include IBM corporate bonds of $3 million. (5) Invests in predominantly fixed-income securities. (6) Primarily represents insurance policy contracts (Buy-In) in certain non-U.S. plans. (7) Includes cash, cash equivalents and short-term marketable securities. (8) Includes interest-rate derivatives, forwards, exchange-traded and other over-the-counter derivatives. (9) Invests in both equity and fixed-income securities. (10) (Investments measured at fair value using the net asset value (NAV) per share (or its equivalent) as a practical expedient, including commingled funds, hedge funds, private equity and real estate partnerships. (11) Represents net unsettled transactions, relating primarily to purchases and sales of plan assets. |
Reconciliation of the beginning and ending balances of Level 3 assets | The following tables present the reconciliation of the beginning and ending balances of Level 3 assets for the years ended December 31, 2023 and 2022 for the U.S. Plan. ($ in millions) Corporate Bonds Private Equity Total Balance at January 1, 2023 $ 721 $ 421 $ 1,142 Return on assets held at end of year (18) (5) (23) Return on assets sold during the year 10 0 10 Purchases, sales and settlements, net (5) (404) (409) Transfers, net 2 — 2 Balance at December 31, 2023 $ 709 $ 13 $ 722 ($ in millions) Corporate Bonds Private Equity Total Balance at January 1, 2022 $ 598 $ — $ 598 Return on assets held at end of year (114) — (114) Return on assets sold during the year (2) — (2) Purchases, sales and settlements, net 206 — 206 Transfers, net 33 421 454 Balance at December 31, 2022 $ 721 $ 421 $ 1,142 The following tables present the reconciliation of the beginning and ending balances of Level 3 assets for the years ended December 31, 2023 and 2022 for the non-U.S. Plans. ($ in millions) Fixed Income Mutual Funds Real Estate Total Balance at January 1, 2023 $ 9 $ 145 $ 155 Return on assets held at end of year 1 (66) (65) Return on assets sold during the year — 56 56 Purchases, sales and settlements, net 63 (137) (74) Transfers, net — 0 0 Foreign exchange impact 2 5 7 Balance at December 31, 2023 $ 75 $ 4 $ 78 ($ in millions) Fixed Income Mutual Funds Real Estate Total Balance at January 1, 2022 $ — $ 174 $ 174 Return on assets held at end of year 0 6 6 Return on assets sold during the year — (1) (1) Purchases, sales and settlements, net 10 (16) (7) Transfers, net — 0 0 Foreign exchange impact 0 (18) (19) Balance at December 31, 2022 $ 9 $ 145 $ 155 |
Schedule of contributions and direct benefit payments | The following table presents the contributions made to the non-U.S. DB plans, nonpension postretirement benefit plans, multi-employer plans, DC plans and direct benefit payments for 2023 and 2022. The cash contributions to the multi-employer plans represent the annual cost included in the net periodic (income)/cost recognized in the Consolidated Income Statement. The company’s participation in multi-employer plans has no material impact on the company’s financial statements. ($ in millions) For the years ended December 31: 2023 2022 Non-U.S. DB plans $ 57 $ 103 Nonpension postretirement benefit plans 233 344 Multi-employer plans 13 15 DC plans 991 924 Direct benefit payments 552 576 Total $ 1,847 $ 1,962 |
Total expected benefit payments, pension benefit plans and nonpension postretirement plans | The following table presents the total expected benefit payments to defined benefit pension plan participants subsequent to the U.S. retirement plan changes, as described above. These payments have been estimated based on the same assumptions used to measure the plans’ PBO at December 31, 2023 and include benefits attributable to estimated future compensation increases, where applicable. ($ in millions) Qualified Nonqualified Qualified Nonqualified Total Expected 2024 $ 1,769 $ 122 $ 1,995 $ 375 $ 4,260 2025 1,830 121 1,977 359 4,286 2026 1,848 119 1,954 362 4,283 2027 1,822 116 1,933 354 4,225 2028 1,780 113 1,903 349 4,145 2029-2033 8,284 522 9,131 1,654 19,591 The 2024 expected benefit payments to defined benefit pension plan participants not covered by the respective plan assets (underfunded plans) represent a component of compensation and benefits, within current liabilities, in the Consolidated Balance Sheet. Nonpension Postretirement Benefit Plan Expected Payments The following table presents the total expected benefit payments to nonpension postretirement benefit plan participants. These payments have been estimated based on the same assumptions used to measure the plans’ APBO at December 31, 2023. ($ in millions) U.S. Plan Qualified Nonqualified Total Expected 2024 $ 217 $ 20 $ 24 $ 261 2025 215 21 24 260 2026 213 22 24 259 2027 208 23 24 255 2028 233 24 24 281 2029-2033 1,085 134 129 1,349 |
Defined benefit pension plans with accumulated benefit obligations (ABO) in excess of plan assets | The following table presents information for defined benefit pension plans with accumulated benefit obligations (ABO) in excess of plan assets. For a more detailed presentation of the funded status of the company’s defined benefit pension plans, refer to the table on page 111 ($ in millions) 2023 2022 At December 31: Benefit Plan Benefit Plan Plans with PBO in excess of plan assets $ 18,345 $ 9,621 $ 17,220 $ 9,694 Plans with ABO in excess of plan assets 18,029 9,604 16,979 9,694 Plans with plan assets in excess of PBO 36,369 43,875 35,534 43,770 |
Schedule of nonpension postretirement benefit plan with APBO in excess of plan assets | The following table presents information for the nonpension postretirement benefit plan with APBO in excess of plan assets. For a more detailed presentation of the funded status of the company’s nonpension postretirement benefit plans, refer to the table on page 111 ($ in millions) 2023 2022 At December 31: Benefit Plan Benefit Plan Plans with APBO in excess of plan assets $ 2,820 $ 32 $ 2,893 $ 32 Plans with plan assets in excess of APBO — — 7 7 |
Significant Accounting Polici_3
Significant Accounting Policies - Basis of Presentation and Principles of Consolidation (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 USD ($) contract | Sep. 30, 2022 USD ($) | Dec. 31, 2023 USD ($) $ / shares | Dec. 31, 2022 USD ($) $ / shares | Dec. 31, 2021 USD ($) $ / shares | |
PROPERTY, PLANT AND EQUIPMENT | |||||
Number of annuity contracts entered into by the company relating to the change in PPP | contract | 2 | ||||
Benefit plan obligation and plan assets transferred to insurers | $ 16,000 | ||||
Pension settlement charge | $ 5,900 | $ 0 | $ 5,894 | $ 0 | |
Pension settlement charge, net of tax | $ 4,400 | 4,400 | |||
Pension settlement charge, tax | 1,500 | ||||
Income from continuing operations | $ 7,514 | $ 1,783 | $ 4,712 | ||
Earnings per share, basic (in dollars per share) | $ / shares | $ 8.23 | $ 1.82 | $ 6.41 | ||
Earnings per share, diluted (in dollars per share) | $ / shares | $ 8.14 | $ 1.80 | $ 6.35 | ||
Provision for/(benefit from) income taxes | $ 1,176 | $ (626) | $ 124 | ||
Equity method investments | 125 | 142 | |||
Equity investments | 131 | 63 | |||
Other (income) and expense | |||||
PROPERTY, PLANT AND EQUIPMENT | |||||
Noncontrolling interest amounts, net of tax | 16 | $ 20 | $ 19 | ||
Service Life | |||||
PROPERTY, PLANT AND EQUIPMENT | |||||
Income from continuing operations | $ 208 | ||||
Earnings per share, basic (in dollars per share) | $ / shares | $ 0.18 | ||||
Earnings per share, diluted (in dollars per share) | $ / shares | $ 0.18 | ||||
Service Life | Server and Network Equipment New Assets | |||||
PROPERTY, PLANT AND EQUIPMENT | |||||
Estimated useful lives of certain depreciable assets | 5 years | 5 years | 6 years | ||
Service Life | Server and Network Equipment Used Assets | |||||
PROPERTY, PLANT AND EQUIPMENT | |||||
Estimated useful lives of certain depreciable assets | 3 years | 3 years | 4 years |
Significant Accounting Polici_4
Significant Accounting Policies - Billing and Financing Components (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue | |
Payment due period from receipt of invoice, per standard billing terms | 30 days |
Practical expedient, financing components | true |
Significant Accounting Polici_5
Significant Accounting Policies - Revenue Recognition for Major Categories of Revenue (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue by Major Products/Service Offerings | |||
Amount of revenue deferred and recognized over the shipping period | $ 0 | ||
Services | |||
Revenue by Major Products/Service Offerings | |||
Contract term, high end of range | 5 years | ||
Deferred income | $ 3,444 | $ 3,241 | |
Contract assets | 420 | 426 | |
Unbilled services accounts receivable included in notes and accounts receivable - trade | $ 816 | $ 788 | |
Services | Maximum | |||
Revenue by Major Products/Service Offerings | |||
Contract term, low end of range | 1 year | ||
Proprietary Term License Software | |||
Revenue by Major Products/Service Offerings | |||
License contract term | 1 month | ||
Open Source Software | |||
Revenue by Major Products/Service Offerings | |||
Standalone selling price | $ 0 | ||
Allocation of consideration to open source software license | 0 | ||
Revenue recognized when control is transferred to client | $ 0 | ||
Financing | |||
Revenue by Major Products/Service Offerings | |||
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration] | Revenue | Revenue | Revenue |
Significant Accounting Polici_6
Significant Accounting Policies - Software Costs (Details) - Capitalized software - Maximum | Dec. 31, 2023 |
Intangible assets | |
Amortization period | 3 years |
Cost of sales | |
Intangible assets | |
Amortization period | 3 years |
SG&A expense or Cost of sales | |
Intangible assets | |
Amortization period | 3 years |
Significant Accounting Polici_7
Significant Accounting Policies - Incremental Costs of Obtaining a Contract (Details) | Dec. 31, 2023 |
Accounting Policies [Abstract] | |
Capitalized costs to obtain contract, expected customer relationship period as amortization period | 3 years |
Significant Accounting Polici_8
Significant Accounting Policies - Product Warranties (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Minimum | |
Product Warranties | |
Product warranty term | 1 year |
Maximum | |
Product Warranties | |
Product warranty term | 3 years |
Significant Accounting Polici_9
Significant Accounting Policies - Advertising and Promotional Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | |||
Advertising and promotional expense | $ 1,237 | $ 1,330 | $ 1,413 |
Significant Accounting Polic_10
Significant Accounting Policies - Government Assistance (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Minimum | |
Government Assistance [Line Items] | |
Government assistance, grant term | 1 year |
Maximum | |
Government Assistance [Line Items] | |
Government assistance, grant term | 5 years |
Significant Accounting Polic_11
Significant Accounting Policies - Depreciation and Amortization (Details) | Dec. 31, 2023 |
Capitalized software | Maximum | |
Depreciation and amortization | |
Amortization period | 3 years |
Other | Minimum | |
Depreciation and amortization | |
Amortization period | 1 year |
Other | Maximum | |
Depreciation and amortization | |
Amortization period | 20 years |
Building | Minimum | |
Depreciation and amortization | |
Estimated useful lives of certain depreciable assets | 30 years |
Building | Maximum | |
Depreciation and amortization | |
Estimated useful lives of certain depreciable assets | 50 years |
Building Improvements | Minimum | |
Depreciation and amortization | |
Estimated useful lives of certain depreciable assets | 10 years |
Building Improvements | Maximum | |
Depreciation and amortization | |
Estimated useful lives of certain depreciable assets | 20 years |
Land Improvements | |
Depreciation and amortization | |
Estimated useful lives of certain depreciable assets | 20 years |
Production, engineering, office and other equipment | Minimum | |
Depreciation and amortization | |
Estimated useful lives of certain depreciable assets | 2 years |
Production, engineering, office and other equipment | Maximum | |
Depreciation and amortization | |
Estimated useful lives of certain depreciable assets | 20 years |
Information technology equipment | Minimum | |
Depreciation and amortization | |
Estimated useful lives of certain depreciable assets | 1 year 6 months |
Information technology equipment | Maximum | |
Depreciation and amortization | |
Estimated useful lives of certain depreciable assets | 6 years |
Leasehold Improvements | Maximum | |
Depreciation and amortization | |
Estimated useful lives of certain depreciable assets | 25 years |
Significant Accounting Polic_12
Significant Accounting Policies - Stock-Based Compensation (Details) | 12 Months Ended |
Dec. 31, 2023 | |
PSUs | |
Stock-Based Compensation | |
Vesting period | 3 years |
Minimum | RSUs | |
Stock-Based Compensation | |
Vesting period | 1 year |
Maximum | RSUs | |
Stock-Based Compensation | |
Vesting period | 4 years |
Significant Accounting Polic_13
Significant Accounting Policies - Fair Value Measurement (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | |||
Impairment for credit losses | $ 0 | $ 0 | $ 0 |
Significant Accounting Polic_14
Significant Accounting Policies - Transfers of Financial Assets (Details) - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | |||
Gross proceeds from transfers of notes and accounts receivable trade | $ 3.4 | $ 3.3 | $ 1.8 |
Accounts receivable sold and derecognized that remain uncollected from customers | $ 0.5 | $ 1 | $ 0.7 |
Significant Accounting Polic_15
Significant Accounting Policies - Financing Receivables (Details) | 12 Months Ended | |
Dec. 31, 2023 class segment | Dec. 31, 2022 class segment | |
Financing receivables | ||
Number of portfolio segments | segment | 2 | 2 |
Number of classes of financing receivable | class | 3 | 3 |
Client Financing Receivables | ||
Financing receivables | ||
Period after which financing receivables become past due | 90 days | |
Maximum | ||
Financing receivables | ||
Reasonable and supportable economic forecast duration | 2 years |
Significant Accounting Polic_16
Significant Accounting Policies - Supplier Financing (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Commitments, guarantees: | ||
Supplier financing obligation | $ 101 | $ 60 |
Supplier Finance Program, Obligation, Statement of Financial Position [Extensible Enumeration] | Accounts payable | Accounts payable |
Minimum | ||
Commitments, guarantees: | ||
Supplier financing term | 90 days | |
Maximum | ||
Commitments, guarantees: | ||
Supplier financing term | 120 days |
Significant Accounting Polic_17
Significant Accounting Policies - Leases (Details) | Dec. 31, 2023 | Dec. 31, 2022 |
Lessee, Lease, Description [Line Items] | ||
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization | Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Short-term debt | Short-term debt |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Long-term debt | Long-term debt |
Real Estate | Weighted Average | ||
Lessee, Lease, Description [Line Items] | ||
Lease terms (in years) | 5 years | |
Equipment | Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Lease terms (in years) | 2 years | |
Equipment | Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Lease terms (in years) | 6 years |
Significant Accounting Polic_18
Significant Accounting Policies - Common Stock (Details) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Accounting Policies [Abstract] | ||
Common stock, Par value (in dollars per share) | $ 0.20 | $ 0.20 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue by Major Products and Service Offerings (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue by Major Products/Service Offerings | |||
Total Revenue | $ 61,860 | $ 60,530 | $ 57,350 |
Operating Segments | |||
Revenue by Major Products/Service Offerings | |||
Total Revenue | 61,627 | 60,077 | 56,231 |
Other | |||
Revenue by Major Products/Service Offerings | |||
Revenue | 233 | 453 | 1,119 |
Software | Operating Segments | |||
Revenue by Major Products/Service Offerings | |||
Total Revenue | 26,308 | 25,037 | 23,426 |
Consulting | Operating Segments | |||
Revenue by Major Products/Service Offerings | |||
Total Revenue | 19,985 | 19,107 | 17,844 |
Infrastructure | Operating Segments | |||
Revenue by Major Products/Service Offerings | |||
Total Revenue | 14,593 | 15,288 | 14,188 |
Financing | Operating Segments | |||
Revenue by Major Products/Service Offerings | |||
Total Revenue | 741 | 645 | 774 |
Hybrid Platform & Solutions | Software | Operating Segments | |||
Revenue by Major Products/Service Offerings | |||
Revenue | 18,693 | 17,866 | 17,036 |
Transaction Processing | Software | Operating Segments | |||
Revenue by Major Products/Service Offerings | |||
Revenue | 7,615 | 7,171 | 6,390 |
Business Transformation | Consulting | Operating Segments | |||
Revenue by Major Products/Service Offerings | |||
Revenue | 9,179 | 8,834 | 8,284 |
Application Operations | Consulting | Operating Segments | |||
Revenue by Major Products/Service Offerings | |||
Revenue | 6,958 | 6,508 | 6,095 |
Technology Consulting | Consulting | Operating Segments | |||
Revenue by Major Products/Service Offerings | |||
Revenue | 3,849 | 3,765 | 3,466 |
Hybrid Infrastructure | Infrastructure | Operating Segments | |||
Revenue by Major Products/Service Offerings | |||
Revenue | 9,215 | 9,451 | 8,167 |
Infrastructure Support | Infrastructure | Operating Segments | |||
Revenue by Major Products/Service Offerings | |||
Revenue | $ 5,377 | $ 5,837 | $ 6,021 |
Revenue Recognition - Disaggr_2
Revenue Recognition - Disaggregation of Revenue by Geography (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue by Geography | |||
Revenue | $ 61,860 | $ 60,530 | $ 57,350 |
Americas | |||
Revenue by Geography | |||
Revenue | 31,666 | 31,057 | 28,299 |
Europe/Middle East/Africa | |||
Revenue by Geography | |||
Revenue | 18,492 | 17,950 | 17,447 |
Asia Pacific | |||
Revenue by Geography | |||
Revenue | $ 11,702 | $ 11,522 | $ 11,604 |
Revenue Recognition - Remaining
Revenue Recognition - Remaining Performance Obligations (Details) $ in Billions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Remaining Performance Obligations | |
Practical expedient, remaining performance obligations | true |
Remaining performance obligations related to customer contracts that are unsatisfied or partially unsatisfied | $ 60 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
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]: 2026-01-01 | |
Remaining Performance Obligations | |
Percentage of remaining performance obligation expected to be recognized | 27% |
Minimum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | |
Remaining Performance Obligations | |
Duration of expected recognition period for remaining performance obligation | 3 years |
Maximum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | |
Remaining Performance Obligations | |
Duration of expected recognition period for remaining performance obligation | 5 years |
Revenue Recognition - Performan
Revenue Recognition - Performance Obligations Satisfied or Partially Satisfied in Prior Periods (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Impact to revenue from performance obligations satisfied (or partially satisfied) in previous periods | $ 16 |
Revenue Recognition - Reconcili
Revenue Recognition - Reconciliation of Contract Balances (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Reconciliation of Contract Balances | ||
Notes and accounts receivable—trade (net of allowances of $192 in 2023 and $233 in 2022) | $ 7,214 | $ 6,541 |
Notes and accounts receivable - trade, allowances | 192 | 233 |
Contract assets | 505 | 464 |
Deferred income (current) | 13,451 | 12,032 |
Deferred income (noncurrent) | 3,533 | $ 3,499 |
Revenue recognized that was included in deferred income at the beginning of the period | $ 10,500 |
Revenue Recognition - Trade All
Revenue Recognition - Trade Allowance for Credit Losses (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Roll forward of notes and accounts receivable - trade allowance for credit losses | ||
Allowance for Credit Loss, Beginning Balance | $ 233 | $ 218 |
Additions/(Releases) | 32 | 59 |
Write-offs | (79) | (31) |
Foreign currency and Other | 6 | (14) |
Allowance for Credit Loss, Ending Balance | $ 192 | $ 233 |
Revenue Recognition - Deferred
Revenue Recognition - Deferred Contract Costs (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Deferred Contract Costs | ||
Deferred contract costs | $ 1,841 | $ 1,833 |
Deferred costs, current | 998 | 967 |
Deferred costs, noncurrent | 842 | 866 |
Amortization of deferred contract costs | 1,493 | |
Capitalized costs to obtain a contract | ||
Deferred Contract Costs | ||
Deferred contract costs | 686 | 563 |
Deferred setup costs | ||
Deferred Contract Costs | ||
Deferred contract costs | 399 | 456 |
Other deferred fulfillment costs | ||
Deferred Contract Costs | ||
Deferred contract costs | $ 755 | $ 814 |
Segments - Results of Continuin
Segments - Results of Continuing Operations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Information | |||
Revenue | $ 61,860 | $ 60,530 | $ 57,350 |
Pre-tax income from continuing operations | 8,690 | 1,156 | 4,837 |
Operating Segments | |||
Segment Information | |||
Revenue | 61,627 | 60,077 | 56,231 |
Pre-tax income from continuing operations | $ 11,283 | $ 10,441 | 8,765 |
Revenue year-to-year change (as a percent) | 2.60% | 6.80% | |
Pre-tax income year-to-year change (as a percent) | 8.10% | 19.10% | |
Pre-tax income margin (as a percent) | 18.30% | 17.40% | |
Operating Segments | Software | |||
Segment Information | |||
Revenue | $ 26,308 | $ 25,037 | 23,426 |
Pre-tax income from continuing operations | $ 6,571 | $ 6,162 | 4,849 |
Revenue year-to-year change (as a percent) | 5.10% | 6.90% | |
Pre-tax income year-to-year change (as a percent) | 6.60% | 27.10% | |
Pre-tax income margin (as a percent) | 25% | 24.60% | |
Operating Segments | Consulting | |||
Segment Information | |||
Revenue | $ 19,985 | $ 19,107 | 17,844 |
Pre-tax income from continuing operations | $ 1,918 | $ 1,677 | 1,449 |
Revenue year-to-year change (as a percent) | 4.60% | 7.10% | |
Pre-tax income year-to-year change (as a percent) | 14.40% | 15.70% | |
Pre-tax income margin (as a percent) | 9.60% | 8.80% | |
Operating Segments | Infrastructure | |||
Segment Information | |||
Revenue | $ 14,593 | $ 15,288 | 14,188 |
Pre-tax income from continuing operations | $ 2,421 | $ 2,262 | 2,025 |
Revenue year-to-year change (as a percent) | (4.50%) | 7.80% | |
Pre-tax income year-to-year change (as a percent) | 7% | 11.70% | |
Pre-tax income margin (as a percent) | 16.60% | 14.80% | |
Operating Segments | Financing | |||
Segment Information | |||
Revenue | $ 741 | $ 645 | 774 |
Pre-tax income from continuing operations | $ 374 | $ 340 | $ 441 |
Revenue year-to-year change (as a percent) | 14.80% | (16.60%) | |
Pre-tax income year-to-year change (as a percent) | 10.10% | (22.90%) | |
Pre-tax income margin (as a percent) | 50.50% | 52.60% |
Segments - Revenue Reconciliati
Segments - Revenue Reconciliation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue | |||
Revenue | $ 61,860 | $ 60,530 | $ 57,350 |
Operating Segments | |||
Revenue | |||
Revenue | 61,627 | 60,077 | 56,231 |
Other | |||
Revenue | |||
Other—divested businesses | (2) | 318 | 785 |
Other revenue | $ 235 | $ 135 | $ 335 |
Segments - Pre-Tax Income Recon
Segments - Pre-Tax Income Reconciliation (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pre-tax income from continuing operations | ||||
Amortization of acquired intangible assets | $ (1,627) | $ (1,747) | $ (1,838) | |
Acquisition-related charges | (33) | (18) | (43) | |
Non-operating retirement-related (costs)/income | 39 | (6,548) | (1,282) | |
Kyndryl-related impacts | 0 | (351) | 118 | |
Workforce rebalancing charges | (435) | 0 | 0 | |
Other-divested businesses | 5 | 91 | (102) | |
Pre-tax income from continuing operations | 8,690 | 1,156 | 4,837 | |
Pre-tax pension settlement charge | $ 5,900 | 0 | 5,894 | 0 |
Operating Segments | ||||
Pre-tax income from continuing operations | ||||
Workforce rebalancing charges | (40) | (182) | ||
Pre-tax income from continuing operations | 11,283 | 10,441 | 8,765 | |
Unallocated corporate amounts and other | ||||
Pre-tax income from continuing operations | ||||
Pre-tax income from continuing operations | $ (541) | $ (712) | $ (782) |
Segments - Assets and Other Ite
Segments - Assets and Other Items (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 USD ($) segment | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Segment Information | |||
Number of business segments to which assets are assigned when ownership is shared between several segments | segment | 1 | ||
Assets | $ 135,241 | $ 127,243 | |
Operating Segments | |||
Segment Information | |||
Assets | 101,883 | 98,667 | $ 98,980 |
Depreciation/amortization of intangibles | 1,659 | 1,936 | 2,001 |
Capital expenditures/investments in intangibles | 1,255 | 1,359 | 1,439 |
Operating Segments | Software | |||
Segment Information | |||
Assets | 61,141 | 57,186 | 58,420 |
Depreciation/amortization of intangibles | 526 | 564 | 598 |
Capital expenditures/investments in intangibles | 385 | 446 | 559 |
Operating Segments | Consulting | |||
Segment Information | |||
Assets | 14,342 | 13,481 | 11,914 |
Depreciation/amortization of intangibles | 106 | 108 | 97 |
Capital expenditures/investments in intangibles | 20 | 33 | 55 |
Operating Segments | Infrastructure | |||
Segment Information | |||
Assets | 11,991 | 12,243 | 11,766 |
Depreciation/amortization of intangibles | 1,018 | 1,250 | 1,257 |
Capital expenditures/investments in intangibles | 836 | 853 | 792 |
Operating Segments | Financing | |||
Segment Information | |||
Interest income | 680 | 582 | 628 |
Interest expense | 298 | 175 | 129 |
Assets | 14,409 | 15,757 | 16,880 |
Depreciation/amortization of intangibles | 8 | 14 | 49 |
Capital expenditures/investments in intangibles | $ 15 | $ 27 | $ 33 |
Segments - Asset Reconciliation
Segments - Asset Reconciliation (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Assets | $ 135,241 | $ 127,243 | |
Deferred tax assets | 6,656 | 6,256 | |
Plant, other property and equipment | 5,492 | 5,308 | $ 5,668 |
Operating right-of-use assets | 3,220 | 2,878 | 3,222 |
Pension assets | 7,506 | 8,236 | |
Operating Segments | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Assets | 101,883 | 98,667 | $ 98,980 |
Elimination of internal transactions | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Assets | (1,028) | (1,062) | |
Other—divested businesses | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Assets | 19 | 100 | |
Unallocated amounts | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Cash and marketable securities | 12,907 | 8,138 | |
Deferred tax assets | 6,468 | 6,078 | |
Plant, other property and equipment | 1,838 | 1,760 | |
Operating right-of-use assets | 2,085 | 1,586 | |
Pension assets | 7,506 | 8,236 | |
Other | $ 3,563 | $ 3,740 |
Segments - Geographic Informati
Segments - Geographic Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Information | |||
Revenue | $ 61,860 | $ 60,530 | $ 57,350 |
Plant and Other Property - Net | 5,492 | 5,308 | 5,668 |
Operating right-of-use assets—net | 3,220 | 2,878 | 3,222 |
Geographic Concentration Risk | Revenue Benchmark | United States | |||
Segment Information | |||
Revenue | 25,309 | 25,098 | 22,893 |
Geographic Concentration Risk | Revenue Benchmark | Other countries | |||
Segment Information | |||
Revenue | 36,551 | 35,432 | 34,457 |
Geographic Concentration Risk | Property, Plant and Equipment | United States | |||
Segment Information | |||
Plant and Other Property - Net | 3,466 | 3,209 | 3,375 |
Geographic Concentration Risk | Property, Plant and Equipment | Other countries | |||
Segment Information | |||
Plant and Other Property - Net | 2,027 | 2,100 | 2,293 |
Geographic Concentration Risk | Operating Right-Of-Use Assets - Net | United States | |||
Segment Information | |||
Operating right-of-use assets—net | 1,249 | 1,074 | 1,148 |
Geographic Concentration Risk | Operating Right-Of-Use Assets - Net | Japan | |||
Segment Information | |||
Operating right-of-use assets—net | 340 | 259 | 398 |
Geographic Concentration Risk | Operating Right-Of-Use Assets - Net | Other countries | |||
Segment Information | |||
Operating right-of-use assets—net | $ 1,631 | $ 1,545 | $ 1,676 |
Segments - Revenue by Product o
Segments - Revenue by Product or Service (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue by Classes of Similar Products or Services | |||
Revenue | $ 61,860 | $ 60,530 | $ 57,350 |
Software | Software | |||
Revenue by Classes of Similar Products or Services | |||
Revenue | 22,483 | 21,374 | 19,845 |
Software | Services | |||
Revenue by Classes of Similar Products or Services | |||
Revenue | 3,764 | 3,575 | 3,485 |
Software | Systems | |||
Revenue by Classes of Similar Products or Services | |||
Revenue | 62 | 88 | 96 |
Consulting | Software | |||
Revenue by Classes of Similar Products or Services | |||
Revenue | 212 | 170 | 173 |
Consulting | Services | |||
Revenue by Classes of Similar Products or Services | |||
Revenue | 19,691 | 18,857 | 17,563 |
Consulting | Systems | |||
Revenue by Classes of Similar Products or Services | |||
Revenue | 82 | 80 | 108 |
Infrastructure | Software | |||
Revenue by Classes of Similar Products or Services | |||
Revenue | 1,658 | 1,585 | 1,426 |
Infrastructure | Services | |||
Revenue by Classes of Similar Products or Services | |||
Revenue | 2,463 | 2,653 | 2,616 |
Infrastructure | Maintenance | |||
Revenue by Classes of Similar Products or Services | |||
Revenue | 4,138 | 4,590 | 4,743 |
Infrastructure | Servers | |||
Revenue by Classes of Similar Products or Services | |||
Revenue | 4,253 | 4,471 | 3,483 |
Infrastructure | Storage | |||
Revenue by Classes of Similar Products or Services | |||
Revenue | 2,081 | 1,989 | 1,919 |
Financing | Financing | |||
Revenue by Classes of Similar Products or Services | |||
Revenue | 680 | 582 | 628 |
Financing | Used equipment sales | |||
Revenue by Classes of Similar Products or Services | |||
Revenue | $ 60 | $ 64 | $ 145 |
Acquisitions & Divestitures - A
Acquisitions & Divestitures - Acquisitions Narrative (Details) € in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Jun. 30, 2024 EUR (€) | Dec. 31, 2023 USD ($) acquisition | Dec. 31, 2022 USD ($) acquisition | Dec. 31, 2021 USD ($) acquisition | Dec. 18, 2023 USD ($) € / option | Dec. 18, 2023 EUR (€) € / option | |
Acquisitions | ||||||
Goodwill | $ 60,178 | $ 55,949 | $ 55,643 | |||
Consulting | ||||||
Acquisitions | ||||||
Goodwill | 8,403 | 7,928 | 6,797 | |||
Software | ||||||
Acquisitions | ||||||
Goodwill | 47,392 | 43,657 | 43,966 | |||
Infrastructure | ||||||
Acquisitions | ||||||
Goodwill | $ 4,384 | $ 4,363 | $ 4,396 | |||
Acquisitions 2023, 2022, and 2021 | ||||||
Acquisitions | ||||||
Percentage of business acquired (as a percent) | 100% | 100% | 100% | |||
2023 Acquisitions | ||||||
Acquisitions | ||||||
Number of acquisitions | acquisition | 9 | |||||
Aggregate acquisitions cost | $ 5,197 | |||||
Apptio | ||||||
Acquisitions | ||||||
Goodwill | $ 3,541 | |||||
Estimated percent of goodwill deductible for tax purposes | 1% | |||||
Weighted average useful life | 8 years 8 months 12 days | |||||
Apptio | Consulting | ||||||
Acquisitions | ||||||
Goodwill | $ 371 | |||||
Apptio | Software | ||||||
Acquisitions | ||||||
Goodwill | 3,170 | |||||
Other Acquisitions 2023 | ||||||
Acquisitions | ||||||
Goodwill | $ 401 | |||||
Estimated percent of goodwill deductible for tax purposes | 0% | |||||
Weighted average useful life | 6 years 7 months 6 days | |||||
Other Acquisitions 2023 | Consulting | ||||||
Acquisitions | ||||||
Goodwill | $ 31 | |||||
Other Acquisitions 2023 | Software | ||||||
Acquisitions | ||||||
Goodwill | 358 | |||||
Other Acquisitions 2023 | Infrastructure | ||||||
Acquisitions | ||||||
Goodwill | 12 | |||||
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 | |||||
2022 Acquisitions | ||||||
Acquisitions | ||||||
Number of acquisitions | acquisition | 8 | |||||
Aggregate acquisitions cost | $ 2,651 | |||||
Cash consideration payable | 238 | |||||
Cash to be remitted | 103 | |||||
Octo | ||||||
Acquisitions | ||||||
Goodwill | $ 829 | |||||
Estimated percent of goodwill deductible for tax purposes | 24% | |||||
Weighted average useful life | 9 years 3 months 18 days | |||||
Octo | Consulting | ||||||
Acquisitions | ||||||
Goodwill | $ 709 | |||||
Octo | Software | ||||||
Acquisitions | ||||||
Goodwill | 120 | |||||
Other Acquisitions 2022 | ||||||
Acquisitions | ||||||
Goodwill | $ 1,055 | |||||
Estimated percent of goodwill deductible for tax purposes | 52% | |||||
Weighted average useful life | 6 years 8 months 12 days | |||||
Other Acquisitions 2022 | Consulting | ||||||
Acquisitions | ||||||
Goodwill | $ 625 | |||||
Other Acquisitions 2022 | Software | ||||||
Acquisitions | ||||||
Goodwill | $ 431 | |||||
2021 Acquisitions | ||||||
Acquisitions | ||||||
Number of acquisitions | acquisition | 15 | |||||
Aggregate acquisitions cost | $ 3,341 | |||||
Turbonomic | ||||||
Acquisitions | ||||||
Goodwill | $ 1,390 | |||||
Estimated percent of goodwill deductible for tax purposes | 0% | |||||
Weighted average useful life | 9 years | |||||
Turbonomic | Consulting | ||||||
Acquisitions | ||||||
Goodwill | $ 65 | |||||
Turbonomic | Software | ||||||
Acquisitions | ||||||
Goodwill | 1,325 | |||||
Other Acquisitions 2021 | ||||||
Acquisitions | ||||||
Goodwill | $ 1,073 | |||||
Estimated percent of goodwill deductible for tax purposes | 9% | |||||
Weighted average useful life | 6 years 7 months 6 days | |||||
Other Acquisitions 2021 | Consulting | ||||||
Acquisitions | ||||||
Goodwill | $ 633 | |||||
Other Acquisitions 2021 | Software | ||||||
Acquisitions | ||||||
Goodwill | $ 440 |
Acquisitions & Divestitures - P
Acquisitions & Divestitures - Purchase Price Allocation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Acquisitions | |||
Goodwill | $ 60,178 | $ 55,949 | $ 55,643 |
2023 Acquisitions | Client relationships | Minimum | |||
Acquisitions | |||
Weighted average useful life | 6 years | ||
2023 Acquisitions | Client relationships | Maximum | |||
Acquisitions | |||
Weighted average useful life | 10 years | ||
2023 Acquisitions | Completed technology | Minimum | |||
Acquisitions | |||
Weighted average useful life | 5 years | ||
2023 Acquisitions | Completed technology | Maximum | |||
Acquisitions | |||
Weighted average useful life | 7 years | ||
2023 Acquisitions | Trademarks | Minimum | |||
Acquisitions | |||
Weighted average useful life | 1 year | ||
2023 Acquisitions | Trademarks | Maximum | |||
Acquisitions | |||
Weighted average useful life | 5 years | ||
Apptio | |||
Acquisitions | |||
Current assets | $ 146 | ||
Property, plant and equipment/noncurrent assets | 4 | ||
Goodwill | 3,541 | ||
Total assets acquired | 5,027 | ||
Current liabilities | 249 | ||
Noncurrent liabilities | 166 | ||
Total liabilities assumed | 415 | ||
Total purchase price | $ 4,612 | ||
Weighted average useful life | 8 years 8 months 12 days | ||
Apptio | Client relationships | |||
Acquisitions | |||
Intangible assets | $ 770 | ||
Apptio | Completed technology | |||
Acquisitions | |||
Intangible assets | 530 | ||
Apptio | Trademarks | |||
Acquisitions | |||
Intangible assets | 35 | ||
Other Acquisitions 2023 | |||
Acquisitions | |||
Current assets | 80 | ||
Property, plant and equipment/noncurrent assets | 12 | ||
Goodwill | 401 | ||
Total assets acquired | 647 | ||
Current liabilities | 41 | ||
Noncurrent liabilities | 20 | ||
Total liabilities assumed | 62 | ||
Total purchase price | $ 585 | ||
Weighted average useful life | 6 years 7 months 6 days | ||
Other Acquisitions 2023 | Client relationships | |||
Acquisitions | |||
Intangible assets | $ 44 | ||
Other Acquisitions 2023 | Completed technology | |||
Acquisitions | |||
Intangible assets | 108 | ||
Other Acquisitions 2023 | Trademarks | |||
Acquisitions | |||
Intangible assets | $ 2 | ||
2022 Acquisitions | Client relationships | Minimum | |||
Acquisitions | |||
Weighted average useful life | 7 years | ||
2022 Acquisitions | Client relationships | Maximum | |||
Acquisitions | |||
Weighted average useful life | 10 years | ||
2022 Acquisitions | Completed technology | Minimum | |||
Acquisitions | |||
Weighted average useful life | 4 years | ||
2022 Acquisitions | Completed technology | Maximum | |||
Acquisitions | |||
Weighted average useful life | 7 years | ||
2022 Acquisitions | Trademarks | Minimum | |||
Acquisitions | |||
Weighted average useful life | 2 years | ||
2022 Acquisitions | Trademarks | Maximum | |||
Acquisitions | |||
Weighted average useful life | 3 years | ||
Octo | |||
Acquisitions | |||
Current assets | $ 119 | ||
Property, plant and equipment/noncurrent assets | 8 | ||
Goodwill | 829 | ||
Total assets acquired | 1,366 | ||
Current liabilities | 53 | ||
Noncurrent liabilities | 50 | ||
Total liabilities assumed | 103 | ||
Total purchase price | $ 1,264 | ||
Weighted average useful life | 9 years 3 months 18 days | ||
Octo | Client relationships | |||
Acquisitions | |||
Intangible assets | $ 365 | ||
Octo | Completed technology | |||
Acquisitions | |||
Intangible assets | 30 | ||
Octo | Trademarks | |||
Acquisitions | |||
Intangible assets | 15 | ||
Other Acquisitions 2022 | |||
Acquisitions | |||
Current assets | 87 | ||
Property, plant and equipment/noncurrent assets | 8 | ||
Goodwill | 1,055 | ||
Total assets acquired | 1,454 | ||
Current liabilities | 52 | ||
Noncurrent liabilities | 15 | ||
Total liabilities assumed | 67 | ||
Total purchase price | $ 1,387 | ||
Weighted average useful life | 6 years 8 months 12 days | ||
Other Acquisitions 2022 | Client relationships | |||
Acquisitions | |||
Intangible assets | $ 204 | ||
Other Acquisitions 2022 | Completed technology | |||
Acquisitions | |||
Intangible assets | 90 | ||
Other Acquisitions 2022 | Trademarks | |||
Acquisitions | |||
Intangible assets | $ 10 | ||
2021 Acquisitions | Client relationships | Minimum | |||
Acquisitions | |||
Weighted average useful life | 4 years | ||
2021 Acquisitions | Client relationships | Maximum | |||
Acquisitions | |||
Weighted average useful life | 10 years | ||
2021 Acquisitions | Completed technology | Minimum | |||
Acquisitions | |||
Weighted average useful life | 4 years | ||
2021 Acquisitions | Completed technology | Maximum | |||
Acquisitions | |||
Weighted average useful life | 7 years | ||
2021 Acquisitions | Trademarks | Minimum | |||
Acquisitions | |||
Weighted average useful life | 1 year | ||
2021 Acquisitions | Trademarks | Maximum | |||
Acquisitions | |||
Weighted average useful life | 6 years | ||
Turbonomic | |||
Acquisitions | |||
Current assets | $ 115 | ||
Property, plant and equipment/noncurrent assets | 11 | ||
Goodwill | 1,390 | ||
Total assets acquired | 1,957 | ||
Current liabilities | 73 | ||
Noncurrent liabilities | 55 | ||
Total liabilities assumed | 128 | ||
Total purchase price | $ 1,829 | ||
Weighted average useful life | 9 years | ||
Turbonomic | Client relationships | |||
Acquisitions | |||
Intangible assets | $ 309 | ||
Turbonomic | Completed technology | |||
Acquisitions | |||
Intangible assets | 117 | ||
Turbonomic | Trademarks | |||
Acquisitions | |||
Intangible assets | 15 | ||
Other Acquisitions 2021 | |||
Acquisitions | |||
Current assets | 112 | ||
Property, plant and equipment/noncurrent assets | 18 | ||
Goodwill | 1,073 | ||
Total assets acquired | 1,636 | ||
Current liabilities | 68 | ||
Noncurrent liabilities | 56 | ||
Total liabilities assumed | 124 | ||
Total purchase price | $ 1,512 | ||
Weighted average useful life | 6 years 7 months 6 days | ||
Other Acquisitions 2021 | Client relationships | |||
Acquisitions | |||
Intangible assets | $ 196 | ||
Other Acquisitions 2021 | Completed technology | |||
Acquisitions | |||
Intangible assets | 206 | ||
Other Acquisitions 2021 | Trademarks | |||
Acquisitions | |||
Intangible assets | $ 31 |
Acquisitions & Divestitures - D
Acquisitions & Divestitures - Divestitures Narrative (Details) | 3 Months Ended | 12 Months Ended | |||||||
Jan. 31, 2024 USD ($) | Jun. 30, 2022 USD ($) | Nov. 03, 2021 USD ($) | Jun. 30, 2023 entity | Mar. 31, 2022 entity | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) entity | Jan. 31, 2022 USD ($) | |
Discontinued Operations | |||||||||
Number of divestitures | entity | 2 | ||||||||
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal, Statement of Income or Comprehensive Income [Extensible Enumeration] | Other (income) and expense | ||||||||
Managed infrastructure services unit | Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | |||||||||
Discontinued Operations | |||||||||
Separation costs | $ 0 | $ 5,000,000 | $ 1,042,000,000 | ||||||
The Weather Company | Discontinued Operations, Held-for-Sale | |||||||||
Discontinued Operations | |||||||||
Disposal group, assets | 545,000,000 | ||||||||
Disposal group, goodwill | 464,000,000 | ||||||||
Disposal group, prepaid and other current assets | 50,000,000 | ||||||||
Disposal group, intangible assets | 21,000,000 | ||||||||
Disposal group, plant, property and equipment | 10,000,000 | ||||||||
Disposal group, liabilities | 19,000,000 | ||||||||
The Weather Company | Discontinued Operations, Held-for-Sale | Subsequent Event | |||||||||
Discontinued Operations | |||||||||
Consideration | $ 1,100,000,000 | ||||||||
Contingent consideration | 250,000,000 | ||||||||
Cash consideration received | 750,000,000 | ||||||||
Financing receivable | $ 100,000,000 | ||||||||
Seller financing loan term | 7 years | ||||||||
Pre-tax gain on sale of business | $ 240,000,000 | ||||||||
The Weather Company | Discontinued Operations, Held-for-Sale | Subsequent Event | Contingent Consideration, Attainment Of Certain Investment Return Metrics | |||||||||
Discontinued Operations | |||||||||
Contingent consideration | $ 200,000,000 | ||||||||
Healthcare software assets divestiture | |||||||||
Discontinued Operations | |||||||||
Consideration | $ 1,065,000,000 | ||||||||
Cash consideration received | $ 1,065,000,000 | ||||||||
Pre-tax gain on sale of business | $ 303,000,000 | ||||||||
Other divestitures | |||||||||
Discontinued Operations | |||||||||
Number of divestitures | entity | 1 | ||||||||
Other divestitures | Disposal Group, Not Discontinued Operations | Infrastructure | |||||||||
Discontinued Operations | |||||||||
Number of divestitures | entity | 1 | ||||||||
Software | |||||||||
Discontinued Operations | |||||||||
Number of divestitures | entity | 2 | ||||||||
Kyndryl Holdings, Inc | |||||||||
Discontinued Operations | |||||||||
Costs to Kyndryl for upgraded hardware | $ 0 | ||||||||
Upgraded hardware period | 2 years | ||||||||
Kyndryl Holdings, Inc | Maximum | |||||||||
Discontinued Operations | |||||||||
Transition services period | 2 years | ||||||||
Kyndryl Holdings, Inc | |||||||||
Discontinued Operations | |||||||||
Ownership interest by stockholders (in percent) | 19.90% |
Acquisitions & Divestitures - M
Acquisitions & Divestitures - Major categories of income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Discontinued Operations | |||
Provision for income taxes | $ (9) | $ 124 | $ 714 |
Income/(loss) from discontinued operations, net of tax | (12) | (143) | 1,030 |
Managed infrastructure services unit | Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | |||
Discontinued Operations | |||
Revenue | 0 | 7 | 14,994 |
Cost of sales | 0 | 24 | 11,270 |
Selling, general and administrative expense | 22 | 86 | 1,900 |
RD&E and Other (income) and expense | (1) | (84) | 80 |
Income/(loss) from discontinued operations before income taxes | (20) | (20) | 1,744 |
Provision for income taxes | (9) | 124 | 714 |
Income/(loss) from discontinued operations, net of tax | $ (12) | $ (143) | $ 1,030 |
Acquisitions & Divestitures - C
Acquisitions & Divestitures - Cash flows (Details) - Managed infrastructure services unit - Discontinued Operations, Disposed of by Means Other than Sale, Spinoff - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Divestitures | |||
Net cash provided by/(used in) operating activities | $ 0 | $ 0 | $ 1,612 |
Net cash provided by/(used in) investing activities | $ 0 | $ 48 | $ (380) |
Other (Income) and Expenses (De
Other (Income) and Expenses (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Other Income and Expenses [Abstract] | ||||
Foreign currency transaction losses/(gains) | $ 116 | $ (643) | $ (204) | |
(Gains)/losses on derivative instruments | (17) | 225 | 205 | |
Interest income | (670) | (162) | (52) | |
Net (gains)/losses from securities and investment assets | (39) | 278 | (133) | |
Retirement-related costs/(income) | (39) | 6,548 | 1,282 | |
Other | (266) | (443) | (225) | |
Total other (income) and expense | (914) | 5,803 | 873 | |
Pension settlement charge | $ 5,900 | $ 0 | $ 5,894 | $ 0 |
Research, Development & Engin_2
Research, Development & Engineering (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Research and Development [Abstract] | |||
RD&E expense | $ 6,775 | $ 6,567 | $ 6,488 |
Scientific research, application of scientific advances, services and application | 6,342 | 6,267 | 6,216 |
Software-related expenses | 3,866 | 3,971 | 3,922 |
Product-related engineering expenses | $ 432 | $ 299 | $ 272 |
Taxes - Income before Income Ta
Taxes - Income before Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income/(loss) from continuing operations before income taxes | |||
U.S. operations | $ (227) | $ (6,602) | $ (2,654) |
Non-U.S. operations | 8,917 | 7,758 | 7,491 |
Income from continuing operations before income taxes | $ 8,690 | $ 1,156 | $ 4,837 |
Taxes - Provision by Geographic
Taxes - Provision by Geographic Operations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Taxes | |||
Provision for/(benefit from) income taxes | $ 1,176 | $ (626) | $ 124 |
U.S. operations | |||
Taxes | |||
Provision for/(benefit from) income taxes | (574) | (2,272) | (969) |
Non-U.S. operations | |||
Taxes | |||
Provision for/(benefit from) income taxes | $ 1,750 | $ 1,645 | $ 1,093 |
Taxes - Provision by Taxing Jur
Taxes - Provision by Taxing Jurisdiction (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
U.S. federal | |||
Current | $ 560 | $ 391 | $ 374 |
Deferred | (1,371) | (2,645) | (1,358) |
Total | (811) | (2,253) | (984) |
U.S. state and local | |||
Current | 127 | 184 | 161 |
Deferred | (162) | (486) | (370) |
Total | (34) | (302) | (209) |
Non-U.S. | |||
Current | 1,594 | 1,676 | 1,342 |
Deferred | 428 | 252 | (25) |
Total | 2,022 | 1,929 | 1,317 |
Total continuing operations provision for/(benefit from) income taxes | 1,176 | (626) | 124 |
Discontinued operations provision for/(benefit from) income taxes | (9) | 124 | 714 |
Total provision for/(benefit from) income taxes | 1,167 | $ (503) | $ 838 |
Provision for social security, real estate, personal property and other taxes | 2,900 | ||
Total taxes included in net income | $ 4,000 |
Taxes - Tax Rate Reconciliation
Taxes - Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of the statutory U.S. federal tax rate to the company's effective tax rate from continuing operations | |||
Statutory rate | 21% | 21% | 21% |
Tax differential on foreign income | (3.00%) | (29.00%) | (10.00%) |
Domestic incentives | (5.00%) | (24.00%) | (5.00%) |
State and local | 0% | (21.00%) | (3.00%) |
Other | 1% | (1.00%) | 0% |
Effective rate | 13.50% | (54.20%) | 3% |
Tax differential on foreign income, portion related to one-time pension settlement charge | (24.00%) | ||
Domestic incentives, portion related to one-time pension settlement charge | (20.00%) | ||
State and local, portion related to one-time pension settlement charge | (21.00%) | ||
Other, portion related to one-time pension settlement charge | (1.00%) |
Taxes - Tax Rate Reconciliati_2
Taxes - Tax Rate Reconciliation Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Effective income tax rate reconciliation, additional disclosures | |||
Effective tax rate (as a percent) | 13.50% | (54.20%) | 3% |
Taxes - Deferred Taxes (Details
Taxes - Deferred Taxes (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred Tax Assets | |||
Retirement benefits | $ 2,269 | $ 1,954 | |
Leases | 1,055 | 927 | |
Share-based and other compensation | 720 | 608 | |
Domestic tax loss/credit carryforwards | 2,194 | 1,798 | |
Deferred income | 682 | 633 | |
Foreign tax loss/credit carryforwards | 651 | 845 | |
Bad debt, inventory and warranty reserves | 305 | 383 | |
Depreciation | 205 | 247 | |
Restructuring charges | 94 | 101 | |
Accruals | 253 | 215 | |
Intangible assets | 2,774 | 2,879 | |
Capitalized research and development | 3,524 | 3,012 | |
Other | 1,141 | 1,157 | |
Gross deferred tax assets | 15,868 | 14,759 | |
Less: valuation allowance | 765 | 770 | $ 883 |
Net deferred tax assets | 15,103 | 13,989 | |
Deferred Tax Liabilities | |||
Goodwill and intangible assets | 3,054 | 3,156 | |
GILTI deferred taxes | 2,195 | 2,483 | |
Leases and right-of-use assets | 1,369 | 1,174 | |
Depreciation | 523 | 505 | |
Retirement benefits | 1,443 | 1,609 | |
Deferred transition costs | 47 | 56 | |
Undistributed foreign earnings | 192 | 87 | |
Other | 770 | 955 | |
Gross deferred tax liabilities | $ 9,593 | $ 10,025 |
Taxes - Carryforwards (Details)
Taxes - Carryforwards (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Loss and tax credit carryforwards | |
Tax effect of foreign and domestic loss carryforwards | $ 681 |
Foreign and domestic tax credit carryforwards | $ 2,164 |
Minimum | |
Loss and tax credit carryforwards | |
Period for which substantially all loss and tax credit carryforwards are available | 2 years |
Period for which the majority of loss and tax credit carryforwards are available | 10 years |
Taxes - Unrecognized Tax Benefi
Taxes - Unrecognized Tax Benefits Reconciliation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Increase (decrease) in amount of unrecognized tax benefits | $ 44 | ||
Reconciliation of the beginning and ending amount of unrecognized tax benefits | |||
Balance at January 1 | 8,728 | $ 8,709 | $ 8,568 |
Additions based on tax positions related to the current year | 296 | 355 | 934 |
Additions for tax positions of prior years | 231 | 174 | 247 |
Reductions for tax positions of prior years (including impacts due to a lapse of statute) | (457) | (470) | (688) |
Settlements | (26) | (41) | (352) |
Balance at December 31 | $ 8,772 | $ 8,728 | $ 8,709 |
Taxes - Unrecognized Tax Bene_2
Taxes - Unrecognized Tax Benefits Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Unrecognized tax benefits | $ 8,772 | $ 8,728 | $ 8,709 | $ 8,568 |
Offsetting tax benefits associated with timing adjustments, potential transfer pricing adjustments, and state income taxes | 567 | |||
Net unrecognized tax benefit amount that, if recognized, would favorably affect the company's effective tax rate | 8,205 | 8,191 | 8,163 | |
Interest expense and penalties, net (benefit)/charge recognized | 379 | 185 | $ 125 | |
Interest and penalties accrued | 1,321 | $ 956 | ||
Reasonably possible reduction in unrecognized tax benefits within the next 12 months | $ 143 |
Taxes - Income Tax Assessments
Taxes - Income Tax Assessments (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Dec. 31, 2020 | Dec. 31, 2023 | |
Income tax examination | |||
Possible additional taxable income based on IRS assessment | $ 4,200 | ||
Ministry of Finance, India | |||
Income tax examination | |||
Prepaid income taxes | $ 557 | ||
Forecast | |||
Income tax examination | |||
Income tax examination, proposed adjustment, estimated increase in income subject to tax | $ 1,200 |
Taxes - Undistributed Foreign E
Taxes - Undistributed Foreign Earnings (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Income Tax Disclosure [Abstract] | ||
Deferred tax liability for undistributed foreign earnings not indefinitely reinvested | $ 192 | $ 87 |
Undistributed earnings of foreign subsidiaries indefinitely reinvested in foreign operations | $ 799 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |||
Weighted-average number of shares on which earnings per share calculations are based | |||||
Basic (in shares) | 911,210,319 | 902,664,190 | 895,990,771 | ||
Add - Incremental shares under stock-based compensation plans (in shares) | 8,700,951 | 7,593,455 | 6,883,290 | ||
Add - Incremental shares associated with contingently issuable shares (in shares) | 2,162,558 | 2,011,417 | 1,766,940 | ||
Assuming dilution (in shares) | 922,073,828 | 912,269,062 | 904,641,001 | ||
Income from continuing operations | $ 7,514 | $ 1,783 | $ 4,712 | ||
Income/(loss) from discontinued operations, net of tax | (12) | (143) | 1,030 | ||
Net income | 7,502 | 1,639 | [1] | 5,743 | [2] |
Net income applicable to contingently issuable shares | 0 | 0 | 0 | ||
Income from continuing operations on which diluted earnings per share is calculated | 7,514 | 1,783 | 4,712 | ||
Income/(loss) from discontinued operations, net of tax, on which diluted earnings per share is calculated | (12) | (143) | 1,030 | ||
Net income on which diluted earnings per share is calculated | $ 7,502 | $ 1,639 | $ 5,743 | ||
Assuming dilution | |||||
Continuing operations (in dollars per share) | $ 8.15 | $ 1.95 | $ 5.21 | ||
Discontinued operations (in dollars per share) | (0.01) | (0.16) | 1.14 | ||
Total (in dollars per share) | 8.14 | 1.80 | 6.35 | ||
Basic | |||||
Continuing operations (in dollars per share) | 8.25 | 1.97 | 5.26 | ||
Discontinued operations (in dollars per share) | (0.01) | (0.16) | 1.15 | ||
Total (in dollars per share) | $ 8.23 | $ 1.82 | $ 6.41 | ||
[1]2022 includes the impact of a one-time, non-cash pension settlement charge. Refer to note V, “Retirement-Related Benefits,” for additional information . Amounts presented have not been recast to exclude discontinued operations. |
Earnings Per Share - Antidiluti
Earnings Per Share - Antidilutive Stock Options (Details) - shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement, Option | |||
Antidilutive stock options | |||
Outstanding stock options not included in the computation of diluted earnings per share (in shares) | 1,761,463 | 814,976 | 980,505 |
Financial Assets & Liabilitie_2
Financial Assets & Liabilities - Fair Value Measurements (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Financial assets and financial liabilities measured at fair value on a recurring basis: | ||
Debt securities - current | $ 373 | $ 852 |
Foreign Exchange Call Option | ||
Financial assets and financial liabilities measured at fair value on a recurring basis: | ||
Derivatives not designated as hedging - Assets | 62 | |
Fair Value, Recurring | ||
Financial assets and financial liabilities measured at fair value on a recurring basis: | ||
Cash equivalents | 7,699 | 4,018 |
Total assets | 8,446 | 5,179 |
Total liabilities | 593 | 1,034 |
Fair Value, Recurring | Prepaid Expenses and Other Current Assets | ||
Financial assets and financial liabilities measured at fair value on a recurring basis: | ||
Derivative assets | 304 | 271 |
Fair Value, Recurring | Other Noncurrent Assets | ||
Financial assets and financial liabilities measured at fair value on a recurring basis: | ||
Derivative assets | 37 | 7 |
Fair Value, Recurring | Other Current Liabilities | ||
Financial assets and financial liabilities measured at fair value on a recurring basis: | ||
Derivative liabilities | 294 | 546 |
Fair Value, Recurring | Other Noncurrent Liabilities | ||
Financial assets and financial liabilities measured at fair value on a recurring basis: | ||
Derivative liabilities | 299 | 488 |
Fair Value, Recurring | Level 1 | ||
Financial assets and financial liabilities measured at fair value on a recurring basis: | ||
Equity investments | 25 | 0 |
Fair Value, Recurring | Level 1 | Money market funds | ||
Financial assets and financial liabilities measured at fair value on a recurring basis: | ||
Cash equivalents | 494 | 306 |
Fair Value, Recurring | Level 2 | ||
Financial assets and financial liabilities measured at fair value on a recurring basis: | ||
Debt securities - current | 373 | 852 |
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 | 2 | 3 |
Derivatives designated as hedging - Liabilities | 299 | 336 |
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 | 131 | 184 |
Derivatives designated as hedging - Liabilities | 275 | 674 |
Derivatives not designated as hedging - Assets | 115 | 42 |
Derivatives not designated as hedging - Liabilities | 19 | 16 |
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 | 93 | 49 |
Derivatives not designated as hedging - Liabilities | 0 | 8 |
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 | 7,206 | 3,712 |
Fair Value, Recurring | Level 2 And 3 | ||
Financial assets and financial liabilities measured at fair value on a recurring basis: | ||
Debt securities - noncurrent | $ 8 | $ 31 |
Financial Assets & Liabilitie_3
Financial Assets & Liabilities - Not Measured at Fair Value (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Long-Term Debt | ||
Long-term debt | $ 50,121 | $ 46,189 |
Fair value of long-term debt | $ 48,284 | $ 42,514 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 78 | $ 158 |
Work in process and raw materials | 1,083 | 1,394 |
Total | $ 1,161 | $ 1,552 |
Financing Receivables - Payment
Financing Receivables - Payment Terms (Details) | 12 Months Ended |
Dec. 31, 2023 | |
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 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Components of the company's financing receivables | |||
Net investment in lease, gross | $ 4,261 | $ 4,023 | |
Net investment in lease, unearned income | (429) | (351) | |
Net investment in lease, unguaranteed residual value | 458 | 422 | |
Net investment in lease, amortized cost | 4,290 | 4,094 | |
Net investment in lease, allowance for credit loss | (63) | (60) | |
Total net investment in lease, net | 4,227 | 4,034 | |
Financing receivable and net investment in lease, gross | 13,173 | 14,136 | |
Financing receivable and net investment in lease, unearned income | (915) | (790) | |
Financing receivable and net investment in lease, unguaranteed residual value | 458 | 422 | |
Financing receivable and net investment in lease, amortized cost | 12,716 | 13,769 | |
Financing receivable and net investment in lease, allowance for credit loss | (156) | (173) | |
Financing receivable and net investment in lease, net | 12,560 | 13,596 | |
Asset Pledged as Collateral | |||
Components of the company's financing receivables | |||
Amortized cost | 232 | 349 | |
Current portion | |||
Components of the company's financing receivables | |||
Net investment in lease, current | 1,520 | 1,485 | |
Financing receivable and net investment in lease, net | 6,793 | 7,790 | |
Noncurrent portion | |||
Components of the company's financing receivables | |||
Net investment in lease, noncurrent | 2,707 | 2,549 | |
Financing receivable and net investment in lease, net | 5,766 | 5,806 | |
Loans Receivable | |||
Components of the company's financing receivables | |||
Financing receivables, gross | 7,060 | 8,875 | |
Unearned income | (486) | (439) | |
Amortized cost | 6,574 | 8,437 | |
Allowance for credit losses | (87) | (108) | |
Total financing receivables, net | 6,486 | 8,329 | |
Loans Receivable | Current portion | |||
Components of the company's financing receivables | |||
Total financing receivables, net | 3,427 | 5,073 | |
Loans Receivable | Noncurrent portion | |||
Components of the company's financing receivables | |||
Total financing receivables, net | 3,059 | 3,256 | |
Held for Investment | |||
Components of the company's financing receivables | |||
Financing receivables, gross | 1,160 | 299 | |
Amortized cost | 1,160 | 299 | |
Allowance for credit losses | (6) | (5) | |
Total financing receivables, net | 1,155 | 293 | |
Held for Investment | Current portion | |||
Components of the company's financing receivables | |||
Total financing receivables, net | 1,155 | 293 | |
Held for Sale | |||
Components of the company's financing receivables | |||
Financing receivables, gross | 692 | 939 | |
Amortized cost | 692 | 939 | |
Total financing receivables, net | 692 | 939 | |
Held for Sale | Current portion | |||
Components of the company's financing receivables | |||
Total financing receivables, net | 692 | 939 | |
Client Financing Receivables | |||
Components of the company's financing receivables | |||
Financing receivable and net investment in lease, amortized cost | 10,863 | 12,531 | |
Financing receivable and net investment in lease, allowance for credit loss | $ (150) | $ (168) | $ (195) |
Financing Receivables - Transfe
Financing Receivables - Transfer of Financing Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Jan. 31, 2024 | Nov. 30, 2023 | |
Financing receivables | ||||
Financing receivable transferred, net gain (loss) | $ (98) | $ (62) | ||
Commercial Financing Receivables | ||||
Financing receivables | ||||
Receivables transferred | 9,248 | 9,029 | ||
Receivables uncollected at end of period | 1,600 | $ 1,561 | ||
Commercial Financing Receivables | Third Party Investor | Subsequent Event | ||||
Financing receivables | ||||
Transfer of financial assets, sales period | 1 year | |||
Commercial Financing Receivables | Third Party Investor | Maximum | ||||
Financing receivables | ||||
Financing receivables to be sold | $ 1,900 | $ 3,000 | ||
Commercial Financing Receivables | Third Party Investor | Maximum | Subsequent Event | ||||
Financing receivables | ||||
Financing receivables to be sold | $ 1,300 |
Financing Receivables - By Port
Financing Receivables - By Portfolio Segment (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 USD ($) class | Dec. 31, 2022 USD ($) class | |
Financing receivables | ||
Number of classes of financing receivable | class | 3 | 3 |
Amortized cost | $ 12,716 | $ 13,769 |
Allowance for credit losses | ||
Allowance for credit losses, beginning balance | 173 | |
Allowance for credit losses, ending balance | 156 | 173 |
Client Financing Receivables | ||
Financing receivables | ||
Amortized cost | 10,863 | 12,531 |
Allowance for credit losses | ||
Allowance for credit losses, beginning balance | 168 | 195 |
Write-offs | (18) | (25) |
Recoveries | 5 | 5 |
Additions/(releases) | (12) | (3) |
Other | 8 | (4) |
Allowance for credit losses, ending balance | 150 | 168 |
Client Financing Receivables | Americas | ||
Financing receivables | ||
Amortized cost | 6,488 | 7,281 |
Allowance for credit losses | ||
Allowance for credit losses, beginning balance | 88 | 111 |
Write-offs | (9) | (20) |
Recoveries | 0 | 1 |
Additions/(releases) | 5 | (5) |
Other | 7 | 2 |
Allowance for credit losses, ending balance | 92 | 88 |
Client Financing Receivables | EMEA | ||
Financing receivables | ||
Amortized cost | 3,007 | 3,546 |
Allowance for credit losses | ||
Allowance for credit losses, beginning balance | 60 | 61 |
Write-offs | (1) | (3) |
Recoveries | 2 | 0 |
Additions/(releases) | (14) | 6 |
Other | 1 | (5) |
Allowance for credit losses, ending balance | 48 | 60 |
Client Financing Receivables | Asia Pacific | ||
Financing receivables | ||
Amortized cost | 1,368 | 1,704 |
Allowance for credit losses | ||
Allowance for credit losses, beginning balance | 20 | 23 |
Write-offs | (8) | (2) |
Recoveries | 3 | 4 |
Additions/(releases) | (4) | (4) |
Other | (1) | (2) |
Allowance for credit losses, ending balance | $ 11 | $ 20 |
Financing Receivables - Past Du
Financing Receivables - Past Due (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Past Due Financing Receivable | ||
Amortized cost | $ 12,716 | $ 13,769 |
Client Financing Receivables | ||
Past Due Financing Receivable | ||
Amortized cost | 10,863 | 12,531 |
Amortized Cost Not Accruing | 110 | 137 |
Impaired financing receivables, related allowance | 106 | 122 |
Client Financing Receivables | Financial Asset, Equal to or Greater than 90 Days Past Due | ||
Past Due Financing Receivable | ||
Amortized cost | 151 | 344 |
Amortized Cost > 90 Days and Accruing | 43 | 208 |
Billed Invoices > 90 Days and Accruing | 7 | 23 |
Client Financing Receivables | Americas | ||
Past Due Financing Receivable | ||
Amortized cost | 6,488 | 7,281 |
Amortized Cost Not Accruing | 71 | 74 |
Client Financing Receivables | Americas | Financial Asset, Equal to or Greater than 90 Days Past Due | ||
Past Due Financing Receivable | ||
Amortized cost | 111 | 272 |
Amortized Cost > 90 Days and Accruing | 40 | 198 |
Billed Invoices > 90 Days and Accruing | 6 | 22 |
Client Financing Receivables | EMEA | ||
Past Due Financing Receivable | ||
Amortized cost | 3,007 | 3,546 |
Amortized Cost Not Accruing | 31 | 46 |
Client Financing Receivables | EMEA | Financial Asset, Equal to or Greater than 90 Days Past Due | ||
Past Due Financing Receivable | ||
Amortized cost | 31 | 52 |
Amortized Cost > 90 Days and Accruing | 1 | 8 |
Billed Invoices > 90 Days and Accruing | 1 | 1 |
Client Financing Receivables | Asia Pacific | ||
Past Due Financing Receivable | ||
Amortized cost | 1,368 | 1,704 |
Amortized Cost Not Accruing | 8 | 17 |
Client Financing Receivables | Asia Pacific | Financial Asset, Equal to or Greater than 90 Days Past Due | ||
Past Due Financing Receivable | ||
Amortized cost | 9 | 20 |
Amortized Cost > 90 Days and Accruing | 1 | 3 |
Billed Invoices > 90 Days and Accruing | $ 0 | $ 1 |
Financing Receivables - Credit
Financing Receivables - Credit Quality Year of Origination (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Amortized cost for each class of receivables, by credit quality indicator | ||
Financing receivable and net investment in lease, amortized cost | $ 12,716 | $ 13,769 |
Americas | Aaa - Baa3 | ||
Amortized cost for each class of receivables, by credit quality indicator | ||
Originated in Current Fiscal Year | 2,292 | 3,316 |
Originated in Fiscal Year before Latest Fiscal Year | 1,645 | 1,197 |
Originated Two Years before Latest Fiscal Year | 655 | 559 |
Originated Three Years before Latest Fiscal Year | 205 | 251 |
Originated Four Years before Latest Fiscal Year | 104 | 128 |
Originated Five or More Years before Latest Fiscal Year | 55 | 32 |
Financing receivable and net investment in lease, amortized cost | 4,955 | 5,482 |
Americas | Ba1 - C | ||
Amortized cost for each class of receivables, by credit quality indicator | ||
Originated in Current Fiscal Year | 1,028 | 1,097 |
Originated in Fiscal Year before Latest Fiscal Year | 268 | 323 |
Originated Two Years before Latest Fiscal Year | 85 | 217 |
Originated Three Years before Latest Fiscal Year | 79 | 91 |
Originated Four Years before Latest Fiscal Year | 23 | 26 |
Originated Five or More Years before Latest Fiscal Year | 50 | 45 |
Financing receivable and net investment in lease, amortized cost | 1,533 | 1,800 |
EMEA | Aaa - Baa3 | ||
Amortized cost for each class of receivables, by credit quality indicator | ||
Originated in Current Fiscal Year | 750 | 1,447 |
Originated in Fiscal Year before Latest Fiscal Year | 687 | 451 |
Originated Two Years before Latest Fiscal Year | 284 | 258 |
Originated Three Years before Latest Fiscal Year | 106 | 161 |
Originated Four Years before Latest Fiscal Year | 58 | 42 |
Originated Five or More Years before Latest Fiscal Year | 16 | 14 |
Financing receivable and net investment in lease, amortized cost | 1,901 | 2,373 |
EMEA | Ba1 - C | ||
Amortized cost for each class of receivables, by credit quality indicator | ||
Originated in Current Fiscal Year | 520 | 704 |
Originated in Fiscal Year before Latest Fiscal Year | 374 | 159 |
Originated Two Years before Latest Fiscal Year | 83 | 158 |
Originated Three Years before Latest Fiscal Year | 60 | 99 |
Originated Four Years before Latest Fiscal Year | 38 | 16 |
Originated Five or More Years before Latest Fiscal Year | 30 | 38 |
Financing receivable and net investment in lease, amortized cost | 1,106 | 1,173 |
Asia Pacific | Aaa - Baa3 | ||
Amortized cost for each class of receivables, by credit quality indicator | ||
Originated in Current Fiscal Year | 501 | 799 |
Originated in Fiscal Year before Latest Fiscal Year | 386 | 203 |
Originated Two Years before Latest Fiscal Year | 110 | 210 |
Originated Three Years before Latest Fiscal Year | 97 | 127 |
Originated Four Years before Latest Fiscal Year | 40 | 84 |
Originated Five or More Years before Latest Fiscal Year | 39 | 12 |
Financing receivable and net investment in lease, amortized cost | 1,174 | 1,434 |
Asia Pacific | Ba1 - C | ||
Amortized cost for each class of receivables, by credit quality indicator | ||
Originated in Current Fiscal Year | 70 | 96 |
Originated in Fiscal Year before Latest Fiscal Year | 42 | 65 |
Originated Two Years before Latest Fiscal Year | 40 | 49 |
Originated Three Years before Latest Fiscal Year | 22 | 22 |
Originated Four Years before Latest Fiscal Year | 8 | 21 |
Originated Five or More Years before Latest Fiscal Year | 12 | 17 |
Financing receivable and net investment in lease, amortized cost | $ 195 | $ 269 |
Property, Plant & Equipment (De
Property, Plant & Equipment (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
PROPERTY, PLANT AND EQUIPMENT | ||
Property, plant and equipment - gross | $ 18,122 | $ 18,695 |
Less: Accumulated depreciation | 12,621 | 13,361 |
Property, plant and equipment—net | 5,501 | 5,334 |
Land and land improvements | ||
PROPERTY, PLANT AND EQUIPMENT | ||
Property, plant and equipment - gross | 182 | 213 |
Buildings and building and leasehold improvements | ||
PROPERTY, PLANT AND EQUIPMENT | ||
Property, plant and equipment - gross | 5,333 | 5,678 |
Information technology equipment | ||
PROPERTY, PLANT AND EQUIPMENT | ||
Property, plant and equipment - gross | 9,223 | 9,643 |
Production, engineering, office and other equipment | ||
PROPERTY, PLANT AND EQUIPMENT | ||
Property, plant and equipment - gross | $ 3,385 | $ 3,161 |
Leases - Components of Lease Co
Leases - Components of Lease Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | |||
Finance lease cost | $ 114 | $ 67 | $ 52 |
Operating lease cost | 1,013 | 1,050 | 1,126 |
Short-term lease cost | 9 | 7 | 21 |
Variable lease cost | 331 | 262 | 336 |
Sublease income | (61) | (72) | (46) |
Total lease cost | 1,406 | 1,315 | 1,489 |
Gains on sale and leaseback transactions, net | $ 145 | $ 41 | $ 7 |
Leases - Cash Flow From Lease T
Leases - Cash Flow From Lease Transactions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities | |||
Operating cash outflows from finance leases | $ 16 | $ 9 | $ 8 |
Financing cash outflows from finance leases | 75 | 55 | 42 |
Operating cash outflows from operating leases | 961 | 1,020 | 1,135 |
ROU assets obtained in exchange for new finance lease liabilities | 355 | 196 | 46 |
ROU assets obtained in exchange for new operating lease liabilities | $ 1,220 | $ 705 | $ 779 |
Leases - Weighted-average Lease
Leases - Weighted-average Lease Terms and Discount Rates (Details) | Dec. 31, 2023 | Dec. 31, 2022 |
Finance leases | ||
Weighted-average remaining lease term (in years) | 5 years 1 month 6 days | 3 years 8 months 12 days |
Weighted-average discount rate | 4.62% | 3.57% |
Operating leases | ||
Weighted-average remaining lease term (in years) | 6 years 2 months 12 days | 4 years 6 months |
Weighted-average discount rate | 4.46% | 3.77% |
Leases - Maturity Analysis of U
Leases - Maturity Analysis of Undiscounted Cash Out Flows (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Finance leases | |
2024 | $ 145 |
2025 | 126 |
2026 | 90 |
2027 | 80 |
2028 | 61 |
Thereafter | 78 |
Imputed Interest | (82) |
Total | 499 |
Operating leases | |
2024 | 948 |
2025 | 761 |
2026 | 616 |
2027 | 452 |
2028 | 281 |
Thereafter | 890 |
Imputed Interest | (560) |
Total | 3,389 |
Amount of leases not yet commenced | $ 247 |
Leases - ROU Assets and Lease L
Leases - ROU Assets and Lease Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
ROU Assets—Property, plant and equipment | $ 481 | $ 223 |
Lease Liabilities | ||
Short-term debt | 121 | 75 |
Long-term debt | $ 379 | $ 164 |
Leases - Lease Amounts Included
Leases - Lease Amounts Included in Consolidated Income Statement (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Lease income—sales-type and direct financing leases | |||
Sales-type lease selling price | $ 1,280 | $ 1,636 | $ 1,355 |
Less: Carrying value of underlying assets | (245) | (385) | (300) |
Gross profit | 1,034 | 1,251 | 1,055 |
Interest income on lease receivables | 242 | 200 | 179 |
Total sales-type and direct financing lease income | 1,276 | 1,451 | 1,234 |
Lease income—operating leases | 93 | 116 | 169 |
Variable lease income | 68 | 87 | 120 |
Total lease income | $ 1,437 | $ 1,653 | $ 1,523 |
Leases - Maturity Analysis of L
Leases - Maturity Analysis of Lease Payments Due on Sales-type and Direct Financing Leases (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Unguaranteed residual value of sales-type and direct financing leases | $ 458 | $ 422 |
Maturity analysis of the lease payments due on sales-type and direct financing leases | ||
2024 | 1,735 | |
2025 | 1,360 | |
2026 | 713 | |
2027 | 353 | |
2028 | 91 | |
Thereafter | 9 | |
Total undiscounted cash flows | 4,261 | |
Present value of lease payments (recognized as financing receivables) | 3,832 | |
Difference between undiscounted cash flows and discounted cash flows | $ 429 |
Intangible Assets Including G_3
Intangible Assets Including Goodwill - Intangible Assets by Class (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Intangible asset balances by major asset class | ||
Gross Carrying Amount | $ 18,265 | $ 17,588 |
Accumulated Amortization | (7,229) | (6,404) |
Net Carrying Amount | 11,036 | 11,184 |
Amount of foreign currency translation increase (decrease) | 50 | (198) |
Capitalized software | ||
Intangible asset balances by major asset class | ||
Gross Carrying Amount | 1,636 | 1,650 |
Accumulated Amortization | (762) | (705) |
Net Carrying Amount | 874 | 945 |
Client relationships | ||
Intangible asset balances by major asset class | ||
Gross Carrying Amount | 9,053 | 8,559 |
Accumulated Amortization | (3,500) | (2,951) |
Net Carrying Amount | 5,553 | 5,608 |
Completed technology | ||
Intangible asset balances by major asset class | ||
Gross Carrying Amount | 5,713 | 5,220 |
Accumulated Amortization | (2,510) | (2,045) |
Net Carrying Amount | 3,203 | 3,175 |
Patents/trademarks | ||
Intangible asset balances by major asset class | ||
Gross Carrying Amount | 1,821 | 2,140 |
Accumulated Amortization | (436) | (688) |
Net Carrying Amount | 1,385 | 1,452 |
Other | ||
Intangible asset balances by major asset class | ||
Gross Carrying Amount | 41 | 19 |
Accumulated Amortization | (20) | (15) |
Net Carrying Amount | $ 22 | $ 4 |
Intangible Assets Including G_4
Intangible Assets Including Goodwill - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Impairment of intangible assets | $ 0 | $ 0 |
Intangible assets, increase (decrease) | (147) | |
Intangible assets acquired | 1,509 | |
Intangible asset amortization expense | 2,287 | 2,397 |
Retirement of fully amortized intangible assets | 1,505 | 1,301 |
Goodwill impairment losses | 0 | 0 |
Goodwill accumulated impairment losses | $ 0 | $ 0 |
Intangible Assets Including G_5
Intangible Assets Including Goodwill - Future Amortization (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Future amortization expense, by year | |
2024 | $ 2,257 |
2025 | 1,973 |
2026 | 1,790 |
2027 | 1,671 |
2028 | 1,368 |
Thereafter | 1,979 |
Capitalized software | |
Future amortization expense, by year | |
2024 | 514 |
2025 | 260 |
2026 | 100 |
2027 | 0 |
2028 | 0 |
Thereafter | 0 |
Acquired intangibles | |
Future amortization expense, by year | |
2024 | 1,743 |
2025 | 1,713 |
2026 | 1,690 |
2027 | 1,671 |
2028 | 1,368 |
Thereafter | $ 1,979 |
Intangible Assets Including G_6
Intangible Assets Including Goodwill - Goodwill by Segment (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Changes in Goodwill Balances | ||
Beginning Balance | $ 55,949 | $ 55,643 |
Goodwill Additions | 3,953 | 1,934 |
Purchase Price Adjustments | (15) | (159) |
Divestitures | 0 | (485) |
Foreign Currency Translation and Other Adjustments | 291 | (984) |
Ending Balance | 60,178 | 55,949 |
Software | ||
Changes in Goodwill Balances | ||
Beginning Balance | 43,657 | 43,966 |
Goodwill Additions | 3,538 | 568 |
Purchase Price Adjustments | (17) | (118) |
Divestitures | 0 | 0 |
Foreign Currency Translation and Other Adjustments | 214 | (760) |
Ending Balance | 47,392 | 43,657 |
Consulting | ||
Changes in Goodwill Balances | ||
Beginning Balance | 7,928 | 6,797 |
Goodwill Additions | 403 | 1,366 |
Purchase Price Adjustments | 2 | (42) |
Divestitures | 0 | 0 |
Foreign Currency Translation and Other Adjustments | 69 | (192) |
Ending Balance | 8,403 | 7,928 |
Infrastructure | ||
Changes in Goodwill Balances | ||
Beginning Balance | 4,363 | 4,396 |
Goodwill Additions | 12 | 0 |
Purchase Price Adjustments | 0 | 0 |
Divestitures | 0 | (1) |
Foreign Currency Translation and Other Adjustments | 8 | (32) |
Ending Balance | 4,384 | 4,363 |
Other | ||
Changes in Goodwill Balances | ||
Beginning Balance | 0 | 484 |
Goodwill Additions | 0 | 0 |
Purchase Price Adjustments | 0 | 0 |
Divestitures | 0 | (484) |
Foreign Currency Translation and Other Adjustments | 0 | 0 |
Ending Balance | $ 0 | $ 0 |
Borrowings - Short-Term Debt (D
Borrowings - Short-Term Debt (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
Short-term debt | $ 6,426 | $ 4,760 |
Borrowings - Long-Term Debt, Co
Borrowings - Long-Term Debt, Components (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Borrowings | ||
Long-term debt, gross | $ 57,598 | $ 51,986 |
Long-term debt excluding finance lease obligations | 57,099 | 51,747 |
Finance lease obligations | 499 | |
Less: net unamortized discount | 838 | 835 |
Less: net unamortized debt issuance costs | 154 | 138 |
Add: fair value adjustment | (60) | (73) |
Total | 56,546 | 50,940 |
Less: current maturities | 6,425 | 4,751 |
Total long-term debt (excluding current portion) | 50,121 | 46,189 |
U.S. dollar | ||
Borrowings | ||
Long-term debt, gross | 35,317 | 33,605 |
Euro | ||
Borrowings | ||
Long-term debt, gross | 19,335 | 17,087 |
Maturing 2023 | U.S. dollar | ||
Borrowings | ||
Long-term debt, gross | $ 0 | 1,529 |
Debt instrument, weighted-average interest rate (as a percent) | 3.40% | |
Maturing 2023 | Euro | ||
Borrowings | ||
Long-term debt, gross | $ 0 | 2,937 |
Debt instrument, weighted-average interest rate (as a percent) | 0.70% | |
Maturing 2024 | U.S. dollar | ||
Borrowings | ||
Long-term debt, gross | $ 5,003 | 5,009 |
Debt instrument, weighted-average interest rate (as a percent) | 3.30% | |
Maturing 2024 | Euro | ||
Borrowings | ||
Long-term debt, gross | $ 829 | 801 |
Debt instrument, weighted-average interest rate (as a percent) | 1.10% | |
Maturing 2025 | U.S. dollar | ||
Borrowings | ||
Long-term debt, gross | $ 1,601 | 1,603 |
Debt instrument, weighted-average interest rate (as a percent) | 5.10% | |
Maturing 2025 | Euro | ||
Borrowings | ||
Long-term debt, gross | $ 3,315 | 3,204 |
Debt instrument, weighted-average interest rate (as a percent) | 1.60% | |
Maturing 2026 | U.S. dollar | ||
Borrowings | ||
Long-term debt, gross | $ 5,201 | 4,351 |
Debt instrument, weighted-average interest rate (as a percent) | 3.50% | |
Maturing 2027 | U.S. dollar | ||
Borrowings | ||
Long-term debt, gross | $ 3,619 | 3,620 |
Debt instrument, weighted-average interest rate (as a percent) | 3.10% | |
Maturing 2027 | Euro | ||
Borrowings | ||
Long-term debt, gross | $ 2,210 | 1,068 |
Debt instrument, weighted-average interest rate (as a percent) | 2.30% | |
Maturing 2028 | U.S. dollar | ||
Borrowings | ||
Long-term debt, gross | $ 1,313 | 313 |
Debt instrument, weighted-average interest rate (as a percent) | 5% | |
Maturing 2028 | Euro | ||
Borrowings | ||
Long-term debt, gross | $ 1,989 | 1,922 |
Debt instrument, weighted-average interest rate (as a percent) | 0.70% | |
Maturing 2029 | U.S. dollar | ||
Borrowings | ||
Long-term debt, gross | $ 3,250 | 3,250 |
Debt instrument, weighted-average interest rate (as a percent) | 3.50% | |
Maturing 2029 | Euro | ||
Borrowings | ||
Long-term debt, gross | $ 1,105 | 1,068 |
Debt instrument, weighted-average interest rate (as a percent) | 1.50% | |
Maturing 2030 | U.S. dollar | ||
Borrowings | ||
Long-term debt, gross | $ 1,350 | 1,350 |
Debt instrument, weighted-average interest rate (as a percent) | 2% | |
Maturing 2030 | Euro | ||
Borrowings | ||
Long-term debt, gross | $ 1,105 | 1,068 |
Debt instrument, weighted-average interest rate (as a percent) | 0.90% | |
Maturing 2031 | Euro | ||
Borrowings | ||
Long-term debt, gross | $ 2,762 | 1,335 |
Debt instrument, weighted-average interest rate (as a percent) | 2.70% | |
Maturing 2032 | U.S. dollar | ||
Borrowings | ||
Long-term debt, gross | $ 1,850 | 1,850 |
Debt instrument, weighted-average interest rate (as a percent) | 4.40% | |
Maturing 2032 | Euro | ||
Borrowings | ||
Long-term debt, gross | $ 1,768 | 1,709 |
Debt instrument, weighted-average interest rate (as a percent) | 0.70% | |
Maturing 2033 | U.S. dollar | ||
Borrowings | ||
Long-term debt, gross | $ 750 | 0 |
Debt instrument, weighted-average interest rate (as a percent) | 4.80% | |
Maturing 2034 | Euro | ||
Borrowings | ||
Long-term debt, gross | $ 1,105 | 1,068 |
Debt instrument, weighted-average interest rate (as a percent) | 1.30% | |
Maturing 2035 | Euro | ||
Borrowings | ||
Long-term debt, gross | $ 1,105 | 0 |
Debt instrument, weighted-average interest rate (as a percent) | 3.80% | |
Maturing 2038 | U.S. dollar | ||
Borrowings | ||
Long-term debt, gross | $ 83 | 83 |
Debt instrument, weighted-average interest rate (as a percent) | 8% | |
Maturing 2038 | Pound sterling | ||
Borrowings | ||
Long-term debt, gross | $ 955 | 0 |
Debt instrument, weighted-average interest rate (as a percent) | 4.90% | |
Maturing 2039 | U.S. dollar | ||
Borrowings | ||
Long-term debt, gross | $ 2,745 | 2,745 |
Debt instrument, weighted-average interest rate (as a percent) | 4.50% | |
Maturing 2040 | U.S. dollar | ||
Borrowings | ||
Long-term debt, gross | $ 650 | 650 |
Debt instrument, weighted-average interest rate (as a percent) | 2.90% | |
Maturing 2040 | Euro | ||
Borrowings | ||
Long-term debt, gross | $ 939 | 908 |
Debt instrument, weighted-average interest rate (as a percent) | 1.20% | |
Maturing 2042 | U.S. dollar | ||
Borrowings | ||
Long-term debt, gross | $ 1,107 | 1,107 |
Debt instrument, weighted-average interest rate (as a percent) | 4% | |
Maturing 2043 | Euro | ||
Borrowings | ||
Long-term debt, gross | $ 1,105 | 0 |
Debt instrument, weighted-average interest rate (as a percent) | 4% | |
Maturing 2045 | U.S. dollar | ||
Borrowings | ||
Long-term debt, gross | $ 27 | 27 |
Debt instrument, weighted-average interest rate (as a percent) | 7% | |
Maturing 2046 | U.S. dollar | ||
Borrowings | ||
Long-term debt, gross | $ 650 | 650 |
Debt instrument, weighted-average interest rate (as a percent) | 4.70% | |
Maturing 2049 | U.S. dollar | ||
Borrowings | ||
Long-term debt, gross | $ 3,000 | 3,000 |
Debt instrument, weighted-average interest rate (as a percent) | 4.30% | |
Maturing 2050 | U.S. dollar | ||
Borrowings | ||
Long-term debt, gross | $ 750 | 750 |
Debt instrument, weighted-average interest rate (as a percent) | 3% | |
Maturing 2052 | U.S. dollar | ||
Borrowings | ||
Long-term debt, gross | $ 1,400 | 1,400 |
Debt instrument, weighted-average interest rate (as a percent) | 4.20% | |
Maturing 2053 | U.S. dollar | ||
Borrowings | ||
Long-term debt, gross | $ 650 | 0 |
Debt instrument, weighted-average interest rate (as a percent) | 5.10% | |
Maturing 2096 | U.S. dollar | ||
Borrowings | ||
Long-term debt, gross | $ 316 | 316 |
Debt instrument, weighted-average interest rate (as a percent) | 7.10% | |
Maturing 2024-2028 | Japanese yen | ||
Borrowings | ||
Long-term debt, gross | $ 1,251 | 694 |
Debt instrument, weighted-average interest rate (as a percent) | 0.50% | |
Maturing 2024-2026 | Other currencies | ||
Borrowings | ||
Long-term debt, gross | $ 241 | 361 |
Debt instrument, weighted-average interest rate (as a percent) | 14.20% | |
Finance Lease Obligations Maturing 2024-2034 | ||
Borrowings | ||
Finance lease obligations | $ 499 | $ 239 |
Finance lease obligations, interest rate (as a percent) | 4.50% |
Borrowings - Long-Term Debt, _2
Borrowings - Long-Term Debt, Covenants (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2023 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) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Japanese Yen Floating Rate Loans | |
Notes Issued | |
Aggregate amount of debt issued | $ 700 |
Credit facility term | 5 years |
Euro fixed-rate notes | |
Notes Issued | |
Aggregate amount of debt issued | $ 4,600 |
Euro fixed-rate notes | Minimum | |
Notes Issued | |
Credit facility term | 4 years |
Coupon rate (as a percent) | 3.375% |
Euro fixed-rate notes | Maximum | |
Notes Issued | |
Credit facility term | 20 years |
Coupon rate (as a percent) | 4% |
Pound sterling fixed-rate notes | |
Notes Issued | |
Aggregate amount of debt issued | $ 900 |
Credit facility term | 15 years |
Coupon rate (as a percent) | 4.875% |
U.S dollar. fixed-rate notes | |
Notes Issued | |
Aggregate amount of debt issued | $ 3,250 |
U.S dollar. fixed-rate notes | Minimum | |
Notes Issued | |
Credit facility term | 3 years |
Coupon rate (as a percent) | 4.50% |
U.S dollar. fixed-rate notes | Maximum | |
Notes Issued | |
Credit facility term | 30 years |
Coupon rate (as a percent) | 5.10% |
Borrowings - Post-Swap Borrowin
Borrowings - Post-Swap Borrowing (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Borrowings | ||
Fixed-rate debt, Amount | $ 48,803 | $ 43,898 |
Floating-rate debt, Amount | 7,743 | 7,042 |
Total | $ 56,546 | $ 50,940 |
Fixed-rate debt, Weighted-average Interest Rate (as a percent) | 3% | 2.70% |
Floating-rate debt, Weighted-average Interest Rate (as a percent) | 6.10% | 5.90% |
Interest Rate Swap | ||
Borrowings | ||
Notional amount | $ 6,725 | $ 6,525 |
Borrowings - Pre-Swap Obligatio
Borrowings - Pre-Swap Obligations (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Pre-swap annual contractual obligations of long-term debt outstanding | ||
2024 | $ 6,427 | |
2025 | 5,090 | |
2026 | 5,624 | |
2027 | 5,898 | |
2028 | 3,959 | |
Thereafter | 30,600 | |
Total | $ 57,598 | $ 51,986 |
Borrowings - Interest on Debt (
Borrowings - Interest on Debt (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Interest on Debt | |||
Interest capitalized | $ 9 | $ 5 | $ 3 |
Total interest paid and accrued | 1,949 | 1,566 | 1,550 |
Cost of financing | |||
Interest on Debt | |||
Interest paid and accrued | 334 | 346 | 392 |
Interest expense | |||
Interest on Debt | |||
Interest paid and accrued | $ 1,607 | $ 1,216 | $ 1,155 |
Borrowings - Lines of Credit (D
Borrowings - Lines of Credit (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Jun. 15, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Three-Year Credit Agreement | ||||
Lines of Credit | ||||
Amount of credit facility | $ 2,500 | |||
Credit facility term | 3 years | |||
Five-Year Credit Agreement | ||||
Lines of Credit | ||||
Amount of credit facility | $ 7,500 | |||
Credit facility term | 5 years | |||
Revolving Credit Facility | ||||
Lines of Credit | ||||
Amount of credit facility | $ 10,000 | |||
Expenses related to credit facility | $ 8 | $ 11 | $ 12 | |
Borrowings outstanding | $ 0 |
Other Liabilities - Components
Other Liabilities - Components (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Other Liabilities | ||
Income tax reserves | $ 6,916 | $ 6,404 |
Deferred taxes | 1,146 | 2,292 |
Excess 401(k) Plus Plan | 1,437 | 1,307 |
Disability benefits | 308 | 303 |
Derivative liabilities | 299 | 488 |
Workforce reductions | 526 | 524 |
Environmental accruals | 206 | 243 |
Other | 639 | 681 |
Total | $ 11,475 | $ 12,243 |
Other Liabilities - Workforce R
Other Liabilities - Workforce Reduction and Environmental Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Other Liabilities Disclosure [Abstract] | ||
Total amounts accrued for workforce reductions | $ 725 | $ 701 |
Amounts accrued for non-ARO environmental liabilities, Balance Sheet location | Other accrued expenses and liabilities | Other accrued expenses and liabilities |
Total amounts accrued for non-ARO environmental liabilities | $ 244 | $ 271 |
Total amounts accrued for ARO liabilities | $ 113 | $ 107 |
Commitments & Contingencies - E
Commitments & Contingencies - Extensions of Credit (Details) - USD ($) $ in Billions | Dec. 31, 2023 | Dec. 31, 2022 |
Extended lines of credit | ||
Commitments, guarantees: | ||
Unused amounts in lines of credit to third-party entities and commitments for future financing to clients | $ 1.4 | $ 1.6 |
Financing for client purchase agreements | ||
Commitments, guarantees: | ||
Unused amounts in lines of credit to third-party entities and commitments for future financing to clients | $ 1.9 | $ 2.1 |
Commitments & Contingencies - S
Commitments & Contingencies - Standard Warranty Liability (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Movement in standard warranty liability | ||
Beginning Balance | $ 79 | $ 77 |
Current period accruals | 84 | 84 |
Accrual adjustments to reflect experience | (14) | (2) |
Charges incurred | (83) | (81) |
Ending Balance | $ 65 | $ 79 |
Commitments & Contingencies -_2
Commitments & Contingencies - Extended Warranty Liability (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Movement in deferred income | ||
Amortization of deferred revenue | $ (10,500) | |
Deferred income (current) | 13,451 | $ 12,032 |
Deferred income (noncurrent) | 3,533 | 3,499 |
Extended Warranty | ||
Movement in deferred income | ||
Beginning Balance | 272 | 350 |
Revenue deferred for new extended warranty contracts | 70 | 100 |
Amortization of deferred revenue | (158) | (163) |
Other | 0 | (15) |
Ending Balance | 184 | 272 |
Deferred income (current) | 110 | 137 |
Deferred income (noncurrent) | $ 74 | $ 135 |
Commitments & Contingencies - C
Commitments & Contingencies - Contingencies (Details) $ in Millions | 12 Months Ended | ||
May 30, 2022 USD ($) | Jun. 08, 2021 USD ($) | Dec. 31, 2023 USD ($) country | |
Brazil Tax Matters | |||
Loss Contingencies | |||
Damages sought, value | $ 400 | ||
BMC v. IBM | |||
Loss Contingencies | |||
Direct damages awarded and appealed, value | $ 718 | ||
Punitive damages awarded and appealed, 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 - Stock Repurch
Equity Activity - Stock Repurchases and Other Transactions (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Equity Activity | |||
Common stock, Shares authorized (in shares) | 4,687,500,000 | 4,687,500,000 | |
Common stock, Par value (in dollars per share) | $ 0.20 | $ 0.20 | |
Common stock, outstanding (in shares) | 915,013,646 | ||
Preferred stock, shares authorized (in shares) | 150,000,000 | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | ||
Common stock repurchase authorization available, value | $ 2,008 | ||
Common stock issued under employee plans (in shares) | 9,794,240 | 8,539,072 | 5,608,845 |
Issue of treasury shares as a result of RSU releases and stock option exercises (in shares) | 2,080,983 | 2,512,300 | 2,093,243 |
Common stock remitted by employees in order to satisfy tax withholding requirements (in shares) | 2,953,554 | 3,027,994 | 2,286,912 |
Value of common shares remitted by employees in order to satisfy tax withholding requirements | $ 402 | $ 407 | $ 319 |
Series A Preferred Stock | |||
Equity Activity | |||
Preferred stock, shares authorized (in shares) | 75,000,000 | ||
Preferred stock, shares issued (in shares) | 57,916,244 | ||
Preferred stock, shares outstanding (in shares) | 0 |
Equity Activity - Reclassificat
Equity Activity - Reclassifications and Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||||
Cost | $ 27,560 | $ 27,842 | $ 25,865 | |
SG&A expense | 19,003 | 18,609 | 18,745 | |
Other (income) and expense | (914) | 5,803 | 873 | |
Interest expense | 1,607 | 1,216 | 1,155 | |
Pre-tax pension settlement charge | $ 5,900 | 0 | 5,894 | 0 |
Pension settlement charge, net of tax | $ 4,400 | 4,400 | ||
Services | ||||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||||
Cost | 21,051 | 21,062 | 19,147 | |
Sales | ||||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||||
Cost | 6,127 | 6,374 | 6,184 | |
Financing | ||||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||||
Cost | 382 | 406 | 534 | |
Accumulated Other Comprehensive Income/(Loss) | ||||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||||
Other comprehensive income/(loss), Before Tax Amount | (2,552) | 8,936 | 6,542 | |
Other comprehensive income/(loss), Tax (Expense)/Benefit | 531 | (2,442) | (1,703) | |
Other comprehensive income/(loss) | (2,021) | 6,494 | 4,839 | |
Unrealized gains/(losses) arising during the period, Net of Tax Amount | (2,331) | 1,007 | 2,608 | |
Reclassification/amortization, Net of Tax Amount | 310 | 5,487 | 2,231 | |
Pre-tax pension settlement charge | 5,900 | |||
Pension settlement charge, net of tax | 4,400 | |||
Foreign currency translation adjustments | ||||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||||
Other comprehensive income/(loss), Before Tax Amount | 3 | 176 | 987 | |
Other comprehensive income/(loss), Tax (Expense)/Benefit | 100 | (406) | (414) | |
Other comprehensive income/(loss) | 103 | (229) | 573 | |
Unrealized gains/(losses) arising during the period, Net of Tax Amount | 103 | (229) | 573 | |
Net changes related to available-for-sale securities | ||||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||||
Other comprehensive income/(loss), Before Tax Amount | 0 | (1) | 0 | |
Other comprehensive income/(loss), Tax (Expense)/Benefit | 0 | 0 | 0 | |
Other comprehensive income/(loss) | 0 | (1) | 0 | |
Unrealized gains/(losses) arising during the period, Before Tax Amount | 0 | (1) | 0 | |
Unrealized gains/(losses) arising during the period, Tax (Expense)/Benefit | 0 | 0 | 0 | |
Unrealized gains/(losses) arising during the period, Net of Tax Amount | 0 | (1) | 0 | |
Unrealized gains/(losses) on cash flow hedges | ||||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||||
Other comprehensive income/(loss), Before Tax Amount | 47 | (158) | 587 | |
Other comprehensive income/(loss), Tax (Expense)/Benefit | (19) | 41 | (149) | |
Other comprehensive income/(loss) | 28 | (117) | 438 | |
Unrealized gains/(losses) arising during the period, Before Tax Amount | 207 | 241 | 344 | |
Unrealized gains/(losses) arising during the period, Tax (Expense)/Benefit | (63) | (64) | (89) | |
Unrealized gains/(losses) arising during the period, Net of Tax Amount | 144 | 178 | 256 | |
Reclassification/amortization, Net of Tax Amount | (115) | (295) | 183 | |
Unrealized gains/(losses) on cash flow hedges | Cost of services | ||||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||||
Reclassification/amortization, Tax (Expense)/Benefit | (1) | 6 | 11 | |
Reclassification/amortization, Net of Tax Amount | 5 | (18) | (32) | |
Unrealized gains/(losses) on cash flow hedges | Cost of sales | ||||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||||
Reclassification/amortization, Tax (Expense)/Benefit | 8 | 28 | (3) | |
Reclassification/amortization, Net of Tax Amount | (14) | (70) | 13 | |
Unrealized gains/(losses) on cash flow hedges | Cost of financing | ||||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||||
Reclassification/amortization, Tax (Expense)/Benefit | (3) | (6) | (6) | |
Reclassification/amortization, Net of Tax Amount | 10 | 18 | 17 | |
Unrealized gains/(losses) on cash flow hedges | SG&A expense | ||||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||||
Reclassification/amortization, Tax (Expense)/Benefit | 4 | 11 | (6) | |
Reclassification/amortization, Net of Tax Amount | (8) | (28) | (19) | |
Unrealized gains/(losses) on cash flow hedges | Other (income) and expense | ||||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||||
Reclassification/amortization, Tax (Expense)/Benefit | 53 | 88 | (40) | |
Reclassification/amortization, Net of Tax Amount | (157) | (261) | 118 | |
Unrealized gains/(losses) on cash flow hedges | Interest expense | ||||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||||
Reclassification/amortization, Tax (Expense)/Benefit | (17) | (22) | (16) | |
Reclassification/amortization, Net of Tax Amount | 49 | 64 | 49 | |
Unrealized gains/(losses) on cash flow hedges | Reclassification out of Accumulated Other Comprehensive Income | ||||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||||
SG&A expense | (12) | (38) | 24 | |
Other (income) and expense | (209) | (349) | 157 | |
Interest expense | 66 | 86 | 65 | |
Unrealized gains/(losses) on cash flow hedges | Reclassification out of Accumulated Other Comprehensive Income | Services | ||||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||||
Cost | 5 | (24) | (43) | |
Unrealized gains/(losses) on cash flow hedges | Reclassification out of Accumulated Other Comprehensive Income | Sales | ||||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||||
Cost | (22) | (99) | 16 | |
Unrealized gains/(losses) on cash flow hedges | Reclassification out of Accumulated Other Comprehensive Income | Financing | ||||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||||
Cost | 14 | 24 | 22 | |
Retirement-related benefit plans | ||||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||||
Other comprehensive income/(loss), Before Tax Amount | (2,602) | 8,919 | 4,969 | |
Other comprehensive income/(loss), Tax (Expense)/Benefit | 450 | (2,078) | (1,140) | |
Other comprehensive income/(loss) | (2,152) | 6,841 | 3,828 | |
Unrealized gains/(losses) arising during the period, Net of Tax Amount | (2,577) | 1,059 | 1,780 | |
Reclassification/amortization, Net of Tax Amount | 425 | 5,782 | 2,049 | |
Prior service costs/(credits) | ||||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||||
Unrealized gains/(losses) arising during the period, Before Tax Amount | 2 | 463 | (51) | |
Unrealized gains/(losses) arising during the period, Tax (Expense)/Benefit | 0 | (99) | (1) | |
Unrealized gains/(losses) arising during the period, Net of Tax Amount | 2 | 364 | (52) | |
Reclassification/amortization, Before Tax Amount | (9) | 12 | 9 | |
Reclassification/amortization, Tax (Expense)/Benefit | 3 | (3) | 0 | |
Reclassification/amortization, Net of Tax Amount | (6) | 9 | 9 | |
Net (losses)/gains arising during the period | ||||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||||
Unrealized gains/(losses) arising during the period, Before Tax Amount | (3,115) | 878 | 2,433 | |
Unrealized gains/(losses) arising during the period, Tax (Expense)/Benefit | 536 | (183) | (601) | |
Unrealized gains/(losses) arising during the period, Net of Tax Amount | (2,579) | 695 | 1,832 | |
Reclassification/amortization, Before Tax Amount | 515 | 1,596 | 2,484 | |
Reclassification/amortization, Tax (Expense)/Benefit | (88) | (304) | (528) | |
Reclassification/amortization, Net of Tax Amount | 427 | 1,293 | 1,956 | |
Curtailments and settlements | ||||
Reclassifications and Taxes Related to Items of Other Comprehensive Income | ||||
Reclassification/amortization, Before Tax Amount | 5 | 5,970 | 94 | |
Reclassification/amortization, Tax (Expense)/Benefit | (1) | (1,490) | (11) | |
Reclassification/amortization, Net of Tax Amount | $ 4 | $ 4,480 | $ 83 |
Equity Activity - AOCI Rollforw
Equity Activity - AOCI Rollforward (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||
Balance at the beginning of the period | $ 22,021 | $ 18,996 | $ 20,727 | ||
Separation of Kyndryl | [1] | (7,203) | |||
Balance at the end of the period | 22,613 | 22,021 | 18,996 | ||
Pre-tax pension settlement charge | $ 5,900 | 0 | 5,894 | 0 | |
Pension settlement charge, net of tax | $ 4,400 | 4,400 | |||
Accumulated Other Comprehensive Income/(Loss) | |||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||
Balance at the beginning of the period | (16,740) | (23,234) | (29,337) | ||
Other comprehensive income before reclassifications | (2,331) | 1,007 | 2,608 | ||
Amount reclassified from accumulated other comprehensive income | 310 | 5,487 | 2,231 | ||
Separation of Kyndryl | [1] | 1,264 | |||
Other comprehensive income/(loss) | 6,103 | ||||
Other comprehensive income/(loss) | (2,021) | 6,494 | 4,839 | ||
Balance at the end of the period | (18,761) | (16,740) | (23,234) | ||
Pre-tax pension settlement charge | 5,900 | ||||
Pension settlement charge, net of tax | 4,400 | ||||
Unrealized gains/(losses) on cash flow hedges | |||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||
Balance at the beginning of the period | (135) | (18) | (456) | ||
Other comprehensive income before reclassifications | 144 | 178 | 256 | ||
Amount reclassified from accumulated other comprehensive income | (115) | (295) | 183 | ||
Other comprehensive income/(loss) | 438 | ||||
Other comprehensive income/(loss) | 28 | (117) | 438 | ||
Balance at the end of the period | (106) | (135) | (18) | ||
Foreign currency translation adjustments | |||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||
Balance at the beginning of the period | (3,591) | (3,362) | (4,665) | ||
Other comprehensive income before reclassifications | 103 | (229) | 573 | ||
Separation of Kyndryl | 730 | ||||
Other comprehensive income/(loss) | 1,303 | ||||
Other comprehensive income/(loss) | 103 | (229) | 573 | ||
Balance at the end of the period | (3,488) | (3,591) | (3,362) | ||
Retirement-related benefit plans | |||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||
Balance at the beginning of the period | (13,013) | (19,854) | (24,216) | ||
Other comprehensive income before reclassifications | (2,577) | 1,059 | 1,780 | ||
Amount reclassified from accumulated other comprehensive income | 425 | 5,782 | 2,049 | ||
Separation of Kyndryl | 534 | ||||
Other comprehensive income/(loss) | 4,362 | ||||
Other comprehensive income/(loss) | (2,152) | 6,841 | 3,828 | ||
Balance at the end of the period | (15,165) | (13,013) | (19,854) | ||
Net changes related to available-for-sale securities | |||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||
Balance at the beginning of the period | (1) | (1) | 0 | ||
Other comprehensive income before reclassifications | 0 | (1) | 0 | ||
Other comprehensive income/(loss) | 0 | ||||
Other comprehensive income/(loss) | 0 | (1) | 0 | ||
Balance at the end of the period | $ (1) | $ (1) | $ (1) | ||
[1] Refer to note E, "Acquisitions & Divestitures," for additional information. |
Derivative Financial Instrume_3
Derivative Financial Instruments - Offsetting (Details) € in Millions, $ in Millions | 12 Months Ended | ||||
Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 18, 2023 USD ($) | Dec. 18, 2023 EUR (€) | |
Derivative Financial Instruments | |||||
Cash collateral rehypothecated | $ 7 | $ 8 | |||
Potential reduction in net position of total derivative liabilities | 235 | 220 | |||
Potential reduction in net position of total derivative assets | 235 | 220 | |||
Unrealized gain (loss) | 17 | (225) | $ (205) | ||
Foreign Exchange Call Option | |||||
Derivative Financial Instruments | |||||
Unrealized gain (loss) | 12 | ||||
Fair value of derivatives | 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 | 11 | 140 | |||
Accounts Payable | |||||
Derivative Financial Instruments | |||||
Obligation to return cash collateral | $ 7 | $ 8 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Kyndryl-Related Transactions (Details) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | |
May 19, 2022 | Dec. 31, 2022 | |
Cash-settled swap | ||
Derivative Financial Instruments | ||
Notional amount | $ 311 | |
Equity securities, gain (loss) | $ (83) | |
Kyndryl Holdings, Inc | ||
Derivative Financial Instruments | ||
Disposition of investment (in shares) | 22.3 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Hedging Programs (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 USD ($) instrument | Dec. 31, 2022 USD ($) instrument | |
Derivative Financial Instruments | ||
Average remaining maturity | 6 years | |
Net Investment Hedging | ||
Derivative Financial Instruments | ||
Notional amount | $ 4,900 | $ 4,700 |
Average remaining maturity | 1 month 6 days | 1 month 6 days |
Interest Rate Swap | ||
Derivative Financial Instruments | ||
Notional amount | $ 6,725 | $ 6,525 |
Interest Rate Swap | Fair Value Hedging | ||
Derivative Financial Instruments | ||
Notional amount | $ 6,700 | $ 6,500 |
Average remaining maturity | 5 years 6 months | 6 years |
Number of derivative instruments outstanding | instrument | 0 | 0 |
Forward-starting interest rate swaps | ||
Derivative Financial Instruments | ||
Gains (losses) expected to be reclassified to net income within the next 12 months | $ (15) | |
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 | $ (121) | $ (139) |
Foreign exchange contracts | ||
Derivative Financial Instruments | ||
Gains (losses) expected to be reclassified to net income within the next 12 months | (69) | |
Foreign exchange contracts | Not Designated as Hedging Instrument, Economic Hedge | ||
Derivative Financial Instruments | ||
Notional amount | $ 6,700 | 5,900 |
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 | 3,100 |
Net gains (losses) before taxes in accumulated other comprehensive income/(loss), cash flow hedges | $ 23 | 0 |
Maximum length of time hedged | 7 years | |
Foreign exchange contracts | Net Investment Hedging | ||
Derivative Financial Instruments | ||
Notional amount | $ 15,900 | 13,400 |
Foreign Exchange Forward | ||
Derivative Financial Instruments | ||
Gains (losses) expected to be reclassified to net income within the next 12 months | (20) | |
Foreign Exchange Forward | Cash Flow Hedging | ||
Derivative Financial Instruments | ||
Notional amount | $ 9,200 | $ 8,100 |
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 | $ 40 | $ 66 |
Maximum length of time hedged | 2 years | |
Currency Swap | ||
Derivative Financial Instruments | ||
Gains (losses) expected to be reclassified to net income within the next 12 months | $ (23) | |
Currency Swap | Cash Flow Hedging | ||
Derivative Financial Instruments | ||
Net gains (losses) before taxes in accumulated other comprehensive income/(loss), cash flow hedges | (68) | (101) |
Equity contracts hedging employee compensation obligations | Not Designated as Hedging Instrument, Economic Hedge | ||
Derivative Financial Instruments | ||
Notional amount | $ 1,200 | $ 1,100 |
Derivative Financial Instrume_6
Derivative Financial Instruments - Cumulative Basis Adjustments for Fair Value Hedges (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
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 | $ (1) | $ (199) |
Cumulative hedging adjustments included in the carrying amount—assets/(liabilities) | $ (1) | $ 1 |
Hedged Liability, Statement of Financial Position [Extensible Enumeration] | Short-term debt | Short-term debt |
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 | $ (6,629) | $ (6,216) |
Cumulative hedging adjustments included in the carrying amount—assets/(liabilities) | $ 61 | $ 72 |
Hedged Liability, Statement of Financial Position [Extensible Enumeration] | Long-term debt | Long-term debt |
Hedging adjustments on discontinued hedging relationships | $ (200) | $ (250) |
Derivative Financial Instrume_7
Derivative Financial Instruments - Effect of Hedge Activity on Income and Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Derivative Instruments, Gain (Loss) | |||
Cost | $ 27,560 | $ 27,842 | $ 25,865 |
SG&A expense | 19,003 | 18,609 | 18,745 |
Other (income) and expense | (914) | 5,803 | 873 |
Interest expense | 1,607 | 1,216 | 1,155 |
Cost of services | |||
Derivative Instruments, Gain (Loss) | |||
Gains/(Losses) of Total Hedge Activity | (5) | 24 | 43 |
Cost of sales | |||
Derivative Instruments, Gain (Loss) | |||
Gains/(Losses) of Total Hedge Activity | 22 | 99 | (16) |
Cost of financing | |||
Derivative Instruments, Gain (Loss) | |||
Gains/(Losses) of Total Hedge Activity | (11) | 2 | 1 |
SG&A expense | |||
Derivative Instruments, Gain (Loss) | |||
Gains/(Losses) of Total Hedge Activity | 165 | (211) | 176 |
Other (income) and expense | |||
Derivative Instruments, Gain (Loss) | |||
Gains/(Losses) of Total Hedge Activity | 17 | (225) | (205) |
Interest expense | |||
Derivative Instruments, Gain (Loss) | |||
Gains/(Losses) of Total Hedge Activity | (54) | 6 | 3 |
Services | |||
Derivative Instruments, Gain (Loss) | |||
Cost | 21,051 | 21,062 | 19,147 |
Sales | |||
Derivative Instruments, Gain (Loss) | |||
Cost | 6,127 | 6,374 | 6,184 |
Financing | |||
Derivative Instruments, Gain (Loss) | |||
Cost | $ 382 | $ 406 | $ 534 |
Derivative Financial Instrume_8
Derivative Financial Instruments - Gains and Losses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
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 | Cost, Interest expense, Selling, general and administrative, Other (income) and expense |
Recognized on Derivatives | $ (140) | $ (1,153) | $ 150 |
Attributable to Risk Being Hedged | (13) | 384 | 71 |
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Recognized in OCI | $ (190) | $ 1,854 | $ 1,989 |
Derivative, Excluded Component, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Cost, Interest expense | Cost, Interest expense | Cost, Interest expense |
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI | $ 189 | $ 400 | $ (243) |
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Amounts Excluded from Effectiveness Testing | 98 | 64 | 23 |
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 | 0 |
Foreign exchange contracts | Not Designated as Hedging Instrument, Economic Hedge | |||
Derivative Instruments, Gain (Loss) | |||
Recognized on Derivatives | (192) | (492) | (48) |
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 | 213 | 241 | 344 |
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Recognized in OCI - Amount excluded from the assessment of effectiveness | (6) | 0 | 0 |
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Amounts Excluded from Effectiveness Testing | (29) | 0 | 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 | (397) | 1,613 | 1,644 |
Cost of financing | Interest rate contracts | Fair Value Hedging | |||
Derivative Instruments, Gain (Loss) | |||
Recognized on Derivatives | (17) | (73) | (1) |
Attributable to Risk Being Hedged | (2) | 85 | 18 |
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 | (3) | (4) | (4) |
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 | (11) | (21) | (18) |
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 | 22 | 14 | 6 |
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 | (5) | 24 | 43 |
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 | 22 | 99 | (16) |
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 | 12 | 38 | (24) |
SG&A expense | Equity contracts | Not Designated as Hedging Instrument, Economic Hedge | |||
Derivative Instruments, Gain (Loss) | |||
Recognized on Derivatives | 153 | (249) | 201 |
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 | 239 | 349 | (157) |
Other (income) and expense | Equity contracts | Not Designated as Hedging Instrument, Economic Hedge | |||
Derivative Instruments, Gain (Loss) | |||
Recognized on Derivatives | 0 | (83) | 0 |
Interest expense | Interest rate contracts | Fair Value Hedging | |||
Derivative Instruments, Gain (Loss) | |||
Recognized on Derivatives | (83) | (257) | (2) |
Attributable to Risk Being Hedged | (11) | 299 | 53 |
Interest expense | Interest rate contracts | Cash Flow Hedging | |||
Derivative Instruments, Gain (Loss) | |||
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI | (15) | (14) | (13) |
Interest expense | Foreign exchange contracts | Cash Flow Hedging | |||
Derivative Instruments, Gain (Loss) | |||
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI | (51) | (72) | (52) |
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 | $ 105 | $ 50 | $ 17 |
Stock-Based Compensation - Cost
Stock-Based Compensation - Cost (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Stock-based compensation cost, allocation of recognized costs | |||
Pre-tax stock-based compensation cost | $ 1,133 | $ 987 | $ 919 |
Income tax benefits | (290) | (249) | (223) |
Net stock-based compensation cost | 843 | 738 | 695 |
Unrecognized compensation cost related to non-vested awards | $ 1,700 | ||
Unrecognized compensation cost related to non-vested awards, weighted average period of recognition | 2 years 6 months | ||
Cost | |||
Stock-based compensation cost, allocation of recognized costs | |||
Pre-tax stock-based compensation cost | $ 190 | 164 | 145 |
SG&A expense | |||
Stock-based compensation cost, allocation of recognized costs | |||
Pre-tax stock-based compensation cost | 616 | 566 | 555 |
RD&E expense | |||
Stock-based compensation cost, allocation of recognized costs | |||
Pre-tax stock-based compensation cost | $ 328 | $ 258 | $ 218 |
Stock-Based Compensation - Ince
Stock-Based Compensation - Incentive Awards (Details) - Share-Based Payment Arrangement shares in Millions | 12 Months Ended |
Dec. 31, 2023 shares | |
Stock-Based Compensation | |
Shares authorized under existing stock based compensation plans (in shares) | 293 |
Additional shares considered authorized under previous stock based compensation plans (in shares) | 66 |
Unused shares available to be granted (in shares) | 50 |
Stock-Based Compensation - RSU
Stock-Based Compensation - RSU and PSU Activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
RSUs | |||
Weighted-Average Grant Price | |||
Beginning balance (in dollars per share) | $ 115 | $ 116 | $ 117 |
Granted (in dollars per share) | 118 | 112 | 125 |
Released (in dollars per share) | 114 | 114 | 120 |
Canceled/forfeited/performance adjusted (in dollars per share) | 115 | 116 | 119 |
Kyndryl separation - cancellation (in dollars per share) | 119 | ||
Ending balance (in dollars per share) | $ 116 | $ 115 | $ 116 |
Number of Units | |||
Beginning balance (in shares) | 21,052,914 | 19,038,480 | 16,896,704 |
Granted (in shares) | 10,915,958 | 11,447,966 | 9,566,307 |
Released (in shares) | (7,383,980) | (7,013,530) | (4,582,159) |
Canceled/forfeited/performance adjusted (in shares) | (1,527,249) | (2,420,002) | (2,072,800) |
Kyndryl separation - adjustment (in shares) | 660,089 | ||
Kyndryl separation - cancellation (in shares) | (1,429,661) | ||
Ending balance (in shares) | 23,057,643 | 21,052,914 | 19,038,480 |
PSUs | |||
Weighted-Average Grant Price | |||
Beginning balance (in dollars per share) | $ 117 | $ 118 | $ 120 |
Granted (in dollars per share) | 117 | 110 | 129 |
Released (in dollars per share) | 113 | 114 | 129 |
Canceled/forfeited/performance adjusted (in dollars per share) | 114 | 116 | 124 |
Kyndryl separation - cancellation (in dollars per share) | 119 | ||
Ending balance (in dollars per share) | $ 118 | $ 117 | $ 118 |
Number of Units | |||
Beginning balance (in shares) | 3,566,078 | 3,728,857 | 3,551,500 |
Granted (in shares) | 1,295,937 | 1,237,019 | 1,561,120 |
Released (in shares) | (840,111) | (679,601) | (581,397) |
Canceled/forfeited/performance adjusted (in shares) | (548,865) | (720,197) | (453,178) |
Kyndryl separation - adjustment (in shares) | 120,428 | ||
Kyndryl separation - cancellation (in shares) | (469,616) | ||
Ending balance (in shares) | 3,473,039 | 3,566,078 | 3,728,857 |
Performance adjustments (in shares) | (404,655) | (362,247) | (223,397) |
Stock-Based Compensation - RSUs
Stock-Based Compensation - RSUs and PSUs, Other Disclosures (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
RSUs and PSUs | |||
Stock-Based Compensation | |||
Tax benefits realized in connection with vesting and release of awards | $ 256 | $ 249 | $ 175 |
RSUs | |||
Stock-Based Compensation | |||
Granted | 1,293 | 1,288 | 1,195 |
Vested | 845 | 801 | 549 |
PSUs | |||
Stock-Based Compensation | |||
Granted | 151 | 136 | 201 |
Vested | $ 95 | $ 77 | $ 75 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options (Details) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 USD ($) anniversary increment $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) shares | |
Stock options | |||
Options granted (in shares) | shares | 4,574,756 | 5,044,353 | 0 |
Options exercised (in shares) | shares | 408,045 | 0 | 0 |
Options forfeited/cancelled/expired (in shares) | shares | 584,674 | 319,560 | 0 |
Proceeds from stock option exercises | $ | $ 51 | ||
Treasury stock, Shares (in shares) | shares | 1,351,897,514 | 1,351,024,943 | |
Share-Based Payment Arrangement, Option | |||
Stock options | |||
Equal increments | increment | 4 | ||
Anniversaries of the grant date | anniversary | 4 | ||
Contractual term | 10 years | ||
Weighted-average fair value (in dollars per share) | $ / shares | $ 22.75 | $ 14.29 | |
Weighted-average remaining contractual term for options outstanding | 7 years 9 months 18 days | ||
Options outstanding, total intrinsic value | $ | $ 328 | ||
Weighted-average remaining contractual term for options vested and exercisable | 4 years 7 months 6 days | ||
Options vested and exercisable, aggregate intrinsic value | $ | $ 73 | ||
Total intrinsic value of options exercised | $ | $ 10 |
Stock-Based Compensation - Weig
Stock-Based Compensation - Weighted Average Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||
Expected term (years) | 6 years 3 months 18 days | 6 years 3 months 18 days |
Expected volatility | 26% | 25.50% |
Risk-free rate | 4.20% | 2% |
Dividend yield | 5% | 5.30% |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock Options Activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Weighted-Average Exercise Price | |||
Outstanding, beginning balance (in dollars per share) | $ 128 | $ 135 | |
Option granted (in dollars per share) | 133 | 125 | |
Options exercised (in dollars per share) | 125 | 0 | |
Options forfeited/canceled/expired (in dollars per share) | 129 | 125 | |
Outstanding, ending balance (in dollars per share) | 130 | $ 128 | $ 135 |
Vested and exercisable (in dollars per share) | $ 132 | ||
Number of Shares Under Option | |||
Outstanding, beginning balance (in shares) | 6,274,525 | 1,549,732 | |
Options granted (in shares) | 4,574,756 | 5,044,353 | 0 |
Options exercised (in shares) | (408,045) | 0 | 0 |
Options forfeited/cancelled/expired (in shares) | (584,674) | (319,560) | 0 |
Outstanding, ending balance (in shares) | 9,856,562 | 6,274,525 | 1,549,732 |
Vested and exercisable (in shares) | 2,297,818 |
Stock-Based Compensation - Acqu
Stock-Based Compensation - Acquisitions (Details) - Share-Based Payment Arrangement, Option shares in Millions | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Stock awards from acquisitions outstanding (in shares) | shares | 0.4 |
Weighted-average exercise price for stock options from acquisitions (in dollars per share) | $ / shares | $ 24 |
Stock-Based Compensation - ESPP
Stock-Based Compensation - ESPP (Details) - USD ($) | 12 Months Ended | 21 Months Ended | |||
Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2023 | |
Stock-Based Compensation | |||||
Average market price (in dollars per share) | $ 117 | $ 114 | |||
Pre-tax stock-based compensation cost | $ 1,133,000,000 | $ 987,000,000 | $ 919,000,000 | ||
Employee Stock | |||||
Stock-Based Compensation | |||||
Discount on purchase of common stock (as a percent) | 5% | 15% | |||
Maximum percentage of payroll deductions on eligible compensation | 10% | 10% | |||
Maximum stock purchases by employees in a calendar year, value | $ 25,000 | ||||
Maximum stock purchases by employees in an offering period (in shares) | 1,000 | ||||
Shares purchased by employees under the ESPP (in shares) | 3,100,000 | 2,400,000 | 1,000,000 | ||
Pre-tax stock-based compensation cost | $ 64,000,000 | $ 43,000,000 | |||
Shares available for purchase (in shares) | 11,300,000 | 11,300,000 |
Retirement-Related Benefits - D
Retirement-Related Benefits - Defined Benefit Plans (Details) | 12 Months Ended | |
Jan. 01, 2024 | Dec. 31, 2023 | |
IBM 401(k) Plus Plan | ||
Defined Benefit Plans | ||
Employer's automatic contribution as a percentage of eligible compensation, lowest level defined | 1% | |
Employer's automatic contribution as a percentage of eligible compensation, second level defined | 2% | |
Employer's automatic contribution as a percentage of eligible compensation, highest level defined | 4% | |
Service period after which employees receive automatic and matching contributions | 1 year | |
IBM Excess 401(k) Plus Plan | Nonqualified Plan | ||
Defined Benefit Plans | ||
Service period after which employees receive automatic and matching contributions | 1 year | |
Pension Plan | IBM 401(k) Plus Plan | Qualified Plan | ||
Defined Benefit Plans | ||
Percentage of dollar-for-dollar match by entity to employee contribution of eligible compensation for employees, lowest level defined | 5% | |
Percentage of dollar-for-dollar match by entity to employee contribution of eligible compensation for employees, highest level defined | 6% | |
United States | Pension Plan | Subsequent Event | ||
Defined Benefit Plans | ||
Benefit contribution monthly percent | 5% | |
United States | Pension Plan | Personal Pension Plan (PPP) | ||
Defined Benefit Plans | ||
Period used in final pay formula that determines benefits | 5 years |
Retirement-Related Benefits - A
Retirement-Related Benefits - All Retirement Plans Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
RETIREMENT-RELATED BENEFITS | ||||
Total defined contribution plans cost | $ 991 | $ 924 | $ 992 | |
Total retirement-related benefits net periodic cost | 1,149 | 7,732 | 2,601 | |
Pension settlement charge | $ 5,900 | 0 | 5,894 | 0 |
Pension Plan | ||||
RETIREMENT-RELATED BENEFITS | ||||
Total defined benefit pension plans (income)/cost | 30 | 6,693 | 1,438 | |
Other Postretirement Benefits Plan | ||||
RETIREMENT-RELATED BENEFITS | ||||
Total defined benefit pension plans (income)/cost | 128 | 115 | 172 | |
United States | ||||
RETIREMENT-RELATED BENEFITS | ||||
Total defined contribution plans cost | 615 | 555 | 582 | |
Total retirement-related benefits net periodic cost | 378 | 6,497 | 1,029 | |
United States | Pension Plan | ||||
RETIREMENT-RELATED BENEFITS | ||||
Total defined benefit pension plans (income)/cost | (329) | 5,857 | 319 | |
Pension settlement charge | $ 5,900 | 5,900 | ||
United States | Other Postretirement Benefits Plan | ||||
RETIREMENT-RELATED BENEFITS | ||||
Total defined benefit pension plans (income)/cost | 92 | 85 | 127 | |
Non-U.S. Plans | ||||
RETIREMENT-RELATED BENEFITS | ||||
Total defined contribution plans cost | 376 | 369 | 409 | |
Total retirement-related benefits net periodic cost | 771 | 1,235 | 1,573 | |
Non-U.S. Plans | Pension Plan | ||||
RETIREMENT-RELATED BENEFITS | ||||
Total defined benefit pension plans (income)/cost | 359 | 836 | 1,119 | |
Non-U.S. Plans | Other Postretirement Benefits Plan | ||||
RETIREMENT-RELATED BENEFITS | ||||
Total defined benefit pension plans (income)/cost | $ 36 | $ 30 | $ 44 |
Retirement-Related Benefits - P
Retirement-Related Benefits - PBO, APBO, FV of Plan Assets, Funded Status (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Overfunded plans | |||
Funded status of plan | |||
Benefit Obligations | $ 36,369 | $ 35,541 | |
Fair Value of Plan Assets | 43,875 | 43,778 | |
Funded Status | 7,506 | 8,236 | |
Underfunded plans | |||
Funded status of plan | |||
Benefit Obligations | 21,165 | 20,113 | |
Fair Value of Plan Assets | 9,653 | 9,726 | |
Funded Status | $ (11,512) | (10,387) | |
Pension Plan | |||
Funded status of plan | |||
Percentage of plan funded | 98% | ||
Pension Plan | Qualified Plan | |||
Funded status of plan | |||
Percentage of plan funded | 111% | ||
United States | Underfunded plans | |||
Funded status of plan | |||
Benefit Obligations | $ 3,615 | 3,771 | |
Fair Value of Plan Assets | 10 | 10 | |
Funded Status | (3,605) | (3,761) | |
United States | Pension Plan | |||
Funded status of plan | |||
Benefit Obligations | 21,235 | 21,493 | $ 48,182 |
Fair Value of Plan Assets | 24,437 | 25,094 | 51,852 |
Funded Status | $ 3,202 | 3,600 | |
Percentage of plan funded | 123% | ||
United States | Pension Plan | Overfunded plans | |||
Funded status of plan | |||
Benefit Obligations | $ 19,854 | 20,091 | |
Fair Value of Plan Assets | 24,437 | 25,094 | |
Funded Status | 4,584 | 5,002 | |
United States | Pension Plan | Underfunded plans | |||
Funded status of plan | |||
Benefit Obligations | 1,382 | 1,402 | |
Fair Value of Plan Assets | 0 | 0 | |
Funded Status | (1,382) | (1,402) | |
United States | Other Postretirement Benefits Plan | |||
Funded status of plan | |||
Benefit Obligations | 2,233 | 2,369 | 3,404 |
Fair Value of Plan Assets | 10 | 10 | 8 |
Funded Status | (2,224) | (2,359) | |
United States | Other Postretirement Benefits Plan | Underfunded plans | |||
Funded status of plan | |||
Benefit Obligations | 2,233 | 2,369 | |
Fair Value of Plan Assets | 10 | 10 | |
Funded Status | (2,224) | (2,359) | |
Non-U.S. Plans | Overfunded plans | |||
Funded status of plan | |||
Benefit Obligations | 16,515 | 15,450 | |
Fair Value of Plan Assets | 19,438 | 18,684 | |
Funded Status | 2,923 | 3,234 | |
Non-U.S. Plans | Underfunded plans | |||
Funded status of plan | |||
Benefit Obligations | 17,550 | 16,342 | |
Fair Value of Plan Assets | 9,643 | 9,716 | |
Funded Status | (7,907) | (6,626) | |
Non-U.S. Plans | Pension Plan | |||
Funded status of plan | |||
Benefit Obligations | 33,479 | 31,261 | 45,097 |
Fair Value of Plan Assets | 29,059 | 28,371 | 39,979 |
Funded Status | (4,420) | (2,891) | |
Non-U.S. Plans | Pension Plan | Overfunded plans | |||
Funded status of plan | |||
Benefit Obligations | 16,515 | 15,443 | |
Fair Value of Plan Assets | 19,438 | 18,677 | |
Funded Status | 2,923 | 3,234 | |
Non-U.S. Plans | Pension Plan | Qualified Plan | Underfunded plans | |||
Funded status of plan | |||
Benefit Obligations | 11,946 | 11,361 | |
Fair Value of Plan Assets | 9,621 | 9,694 | |
Funded Status | (2,325) | (1,667) | |
Non-U.S. Plans | Pension Plan | Nonqualified Plan | Underfunded plans | |||
Funded status of plan | |||
Benefit Obligations | 5,018 | 4,457 | |
Fair Value of Plan Assets | 0 | 0 | |
Funded Status | (5,018) | (4,457) | |
Non-U.S. Plans | Other Postretirement Benefits Plan | |||
Funded status of plan | |||
Benefit Obligations | 586 | 531 | 638 |
Fair Value of Plan Assets | 23 | 29 | $ 31 |
Funded Status | (564) | (501) | |
Non-U.S. Plans | Other Postretirement Benefits Plan | Overfunded plans | |||
Funded status of plan | |||
Benefit Obligations | 0 | 7 | |
Fair Value of Plan Assets | 0 | 7 | |
Funded Status | 0 | 0 | |
Non-U.S. Plans | Other Postretirement Benefits Plan | Underfunded plans | |||
Funded status of plan | |||
Benefit Obligations | 586 | 524 | |
Fair Value of Plan Assets | 23 | 22 | |
Funded Status | $ (564) | $ (502) |
Retirement-Related Benefits - N
Retirement-Related Benefits - Net Periodic Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Components of net periodic (income)/cost of the retirement-related benefit plans | ||||
Pension settlement charge | $ 5,900 | $ 0 | $ 5,894 | $ 0 |
Pension Plan | ||||
Components of net periodic (income)/cost of the retirement-related benefit plans | ||||
Total net periodic pension / nonpension (income)/cost of defined benefit plans | 30 | 6,693 | 1,438 | |
Other Postretirement Benefits Plan | ||||
Components of net periodic (income)/cost of the retirement-related benefit plans | ||||
Total net periodic pension / nonpension (income)/cost of defined benefit plans | 128 | 115 | 172 | |
United States | Pension Plan | ||||
Components of net periodic (income)/cost of the retirement-related benefit plans | ||||
Service cost | 0 | 0 | 0 | |
Interest cost | 1,090 | 1,129 | 1,109 | |
Expected return on plan assets | (1,529) | (1,729) | (1,802) | |
Amortization of prior service costs/(credits) | 0 | 8 | 16 | |
Recognized actuarial losses | 109 | 527 | 996 | |
Curtailments and settlements | 0 | 5,923 | 0 | |
Multi-employer plans | 0 | 0 | 0 | |
Other costs/(credits) | 0 | 0 | 0 | |
Total net periodic pension / nonpension (income)/cost of defined benefit plans | (329) | 5,857 | 319 | |
Pension settlement charge | $ 5,900 | 5,900 | ||
United States | Pension Plan | Qualified Plan | ||||
Components of net periodic (income)/cost of the retirement-related benefit plans | ||||
Pension settlement charge | 5,900 | |||
United States | Other Postretirement Benefits Plan | ||||
Components of net periodic (income)/cost of the retirement-related benefit plans | ||||
Service cost | 4 | 5 | 7 | |
Interest cost | 117 | 85 | 65 | |
Expected return on plan assets | 0 | 0 | 0 | |
Amortization of prior service costs/(credits) | (29) | (10) | 4 | |
Recognized actuarial losses | 0 | 5 | 52 | |
Curtailments and settlements | 0 | 0 | 0 | |
Other costs/(credits) | 0 | 0 | 0 | |
Total net periodic pension / nonpension (income)/cost of defined benefit plans | 92 | 85 | 127 | |
Non-U.S. Plans | Pension Plan | ||||
Components of net periodic (income)/cost of the retirement-related benefit plans | ||||
Service cost | 177 | 237 | 300 | |
Interest cost | 1,170 | 493 | 424 | |
Expected return on plan assets | (1,440) | (1,016) | (1,115) | |
Amortization of prior service costs/(credits) | 20 | 14 | (12) | |
Recognized actuarial losses | 400 | 1,031 | 1,392 | |
Curtailments and settlements | 7 | 47 | 94 | |
Multi-employer plans | 13 | 15 | 17 | |
Other costs/(credits) | 13 | 15 | 18 | |
Total net periodic pension / nonpension (income)/cost of defined benefit plans | 359 | 836 | 1,119 | |
Non-U.S. Plans | Other Postretirement Benefits Plan | ||||
Components of net periodic (income)/cost of the retirement-related benefit plans | ||||
Service cost | 2 | 3 | 4 | |
Interest cost | 39 | 24 | 27 | |
Expected return on plan assets | (2) | (2) | (3) | |
Amortization of prior service costs/(credits) | 0 | 0 | 0 | |
Recognized actuarial losses | (1) | 4 | 15 | |
Curtailments and settlements | (2) | 0 | 0 | |
Other costs/(credits) | 0 | 0 | 0 | |
Total net periodic pension / nonpension (income)/cost of defined benefit plans | $ 36 | $ 30 | $ 44 |
Retirement-Related Benefits - U
Retirement-Related Benefits - U.S. Retirement Plan Changes (Details) participant in Thousands, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Jan. 01, 2024 | Sep. 30, 2022 USD ($) participant | Sep. 30, 2022 USD ($) | Dec. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Defined Benefit Plans | |||||||
Benefit plan obligation and plan assets transferred to insurers | $ 16,000 | ||||||
Pension settlement charge | $ 5,900 | $ 0 | $ 5,894 | $ 0 | |||
Pension settlement charge, net of tax | $ 4,400 | 4,400 | |||||
Overfunded plans | |||||||
Defined Benefit Plans | |||||||
Funded status | 7,506 | 8,236 | |||||
Underfunded plans | |||||||
Defined Benefit Plans | |||||||
Funded status | (11,512) | (10,387) | |||||
United States | Underfunded plans | |||||||
Defined Benefit Plans | |||||||
Funded status | $ (3,605) | (3,761) | |||||
Pension Plan | |||||||
Defined Benefit Plans | |||||||
Percentage of plan funded | 98% | ||||||
Pension Plan | Qualified Plan | |||||||
Defined Benefit Plans | |||||||
Percentage of plan funded | 111% | ||||||
Pension Plan | United States | |||||||
Defined Benefit Plans | |||||||
Benefit plan obligation and plan assets transferred to insurers | $ 16,000 | ||||||
Number of participants transferred to insurers | participant | 100 | ||||||
Percentage of transferred participant pension benefits each insurer is responsible to pay | 50% | 50% | |||||
Pension settlement charge | $ 5,900 | 5,900 | |||||
Pension settlement charge, net of tax | $ 4,400 | ||||||
Percentage of plan funded | 123% | ||||||
Funded status | $ 3,202 | 3,600 | |||||
Amortization of prior service costs/(credits) | 0 | 8 | $ 16 | ||||
Pension Plan | United States | Forecast | |||||||
Defined Benefit Plans | |||||||
Amortization of prior service costs/(credits) | $ 300 | ||||||
Pension Plan | United States | Subsequent Event | |||||||
Defined Benefit Plans | |||||||
Service period | 1 year | ||||||
Benefit contribution monthly percent | 5% | ||||||
Benefit contribution interest percent, through 2026 | 6% | ||||||
Pension Plan | United States | Subsequent Event | Minimum | |||||||
Defined Benefit Plans | |||||||
Benefit contribution interest percent, 2027 through 2033 | 3% | ||||||
Pension Plan | United States | Overfunded plans | |||||||
Defined Benefit Plans | |||||||
Funded status | 4,584 | 5,002 | |||||
Pension Plan | United States | Underfunded plans | |||||||
Defined Benefit Plans | |||||||
Funded status | $ (1,382) | (1,402) | |||||
Pension Plan | United States | Qualified Plan | |||||||
Defined Benefit Plans | |||||||
Pension settlement charge | $ 5,900 |
Retirement-Related Benefits - C
Retirement-Related Benefits - Change in Benefit Obligation and Plan Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pension Plan | |||
Change in plan assets | |||
Future participant compensation increases | $ 0 | $ 0 | $ 0 |
Pension Plan | United States | |||
Change in benefit obligation | |||
Benefit obligation, balance at beginning of period | 21,493 | 48,182 | |
Service cost | 0 | 0 | 0 |
Interest cost | 1,090 | 1,129 | 1,109 |
Plan participants' contributions | 0 | 0 | |
Acquisitions/divestitures, net | 0 | 0 | |
Actuarial losses/(gains) | 486 | (7,849) | |
Benefits paid from trust | (1,424) | (3,133) | |
Direct benefit payments | (122) | (123) | |
Foreign exchange impact | 0 | 0 | |
Amendments/curtailments/settlements/other | (288) | (16,712) | |
Benefit obligation, balance at end of period | 21,235 | 21,493 | 48,182 |
Change in plan assets | |||
Fair value of plan assets, balance at beginning of period | 25,094 | 51,852 | |
Actual return on plan assets | 1,055 | (6,914) | |
Employer contributions | 0 | 0 | |
Acquisitions/divestitures, net | 0 | 0 | |
Plan participants' contributions | 0 | 0 | |
Benefits paid from trust | (1,424) | (3,133) | |
Foreign exchange impact | 0 | 0 | |
Amendments/curtailments/settlements/other | (288) | (16,712) | |
Fair value of plan assets, balance at end of period | 24,437 | 25,094 | 51,852 |
Funded Status | 3,202 | 3,600 | |
Accumulated benefit obligation | 21,235 | 21,493 | |
Pension Plan | Non-U.S. Plans | |||
Change in benefit obligation | |||
Benefit obligation, balance at beginning of period | 31,261 | 45,097 | |
Service cost | 177 | 237 | 300 |
Interest cost | 1,170 | 493 | 424 |
Plan participants' contributions | 17 | 14 | |
Acquisitions/divestitures, net | (20) | (45) | |
Actuarial losses/(gains) | 2,077 | (8,819) | |
Benefits paid from trust | (1,629) | (1,572) | |
Direct benefit payments | (396) | (418) | |
Foreign exchange impact | 1,021 | (3,463) | |
Amendments/curtailments/settlements/other | (198) | (262) | |
Benefit obligation, balance at end of period | 33,479 | 31,261 | 45,097 |
Change in plan assets | |||
Fair value of plan assets, balance at beginning of period | 28,371 | 39,979 | |
Actual return on plan assets | 1,391 | (6,737) | |
Employer contributions | 57 | 103 | |
Acquisitions/divestitures, net | (24) | (20) | |
Plan participants' contributions | 17 | 14 | |
Benefits paid from trust | (1,629) | (1,572) | |
Foreign exchange impact | 1,058 | (3,154) | |
Amendments/curtailments/settlements/other | (181) | (243) | |
Fair value of plan assets, balance at end of period | 29,059 | 28,371 | 39,979 |
Funded Status | (4,420) | (2,891) | |
Accumulated benefit obligation | 33,128 | 30,961 | |
Other Postretirement Benefits Plan | United States | |||
Change in benefit obligation | |||
Benefit obligation, balance at beginning of period | 2,369 | 3,404 | |
Service cost | 4 | 5 | 7 |
Interest cost | 117 | 85 | 65 |
Plan participants' contributions | 38 | 43 | |
Acquisitions/divestitures, net | 0 | 0 | |
Actuarial losses/(gains) | (19) | (780) | |
Benefits paid from trust | (274) | (385) | |
Direct benefit payments | (3) | (2) | |
Foreign exchange impact | 0 | 0 | |
Amendments/curtailments/settlements/other | 0 | 0 | |
Benefit obligation, balance at end of period | 2,233 | 2,369 | 3,404 |
Change in plan assets | |||
Fair value of plan assets, balance at beginning of period | 10 | 8 | |
Actual return on plan assets | 0 | 0 | |
Employer contributions | 233 | 344 | |
Acquisitions/divestitures, net | 0 | 0 | |
Plan participants' contributions | 38 | 43 | |
Benefits paid from trust | (274) | (385) | |
Foreign exchange impact | 0 | 0 | |
Amendments/curtailments/settlements/other | 2 | 0 | |
Fair value of plan assets, balance at end of period | 10 | 10 | 8 |
Funded Status | (2,224) | (2,359) | |
Other Postretirement Benefits Plan | Non-U.S. Plans | |||
Change in benefit obligation | |||
Benefit obligation, balance at beginning of period | 531 | 638 | |
Service cost | 2 | 3 | 4 |
Interest cost | 39 | 24 | 27 |
Plan participants' contributions | 0 | 0 | |
Acquisitions/divestitures, net | 0 | 0 | |
Actuarial losses/(gains) | 35 | (87) | |
Benefits paid from trust | (7) | (6) | |
Direct benefit payments | (31) | (32) | |
Foreign exchange impact | 22 | (10) | |
Amendments/curtailments/settlements/other | (4) | (1) | |
Benefit obligation, balance at end of period | 586 | 531 | 638 |
Change in plan assets | |||
Fair value of plan assets, balance at beginning of period | 29 | 31 | |
Actual return on plan assets | 3 | 3 | |
Employer contributions | 0 | 0 | |
Acquisitions/divestitures, net | 0 | 0 | |
Plan participants' contributions | 0 | 0 | |
Benefits paid from trust | (7) | (6) | |
Foreign exchange impact | 3 | 2 | |
Amendments/curtailments/settlements/other | (6) | 0 | |
Fair value of plan assets, balance at end of period | 23 | 29 | $ 31 |
Funded Status | $ (564) | $ (501) |
Retirement-Related Benefits -_2
Retirement-Related Benefits - Net Funded Status (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Net funded status recognized in the Consolidated Balance Sheet | ||
Prepaid pension assets | $ 7,506 | $ 8,236 |
Current liabilities—compensation and benefits | (3,501) | (3,481) |
Noncurrent liabilities—retirement and nonpension postretirement benefit obligations | (10,808) | (9,596) |
Pension Plan | United States | ||
Net funded status recognized in the Consolidated Balance Sheet | ||
Prepaid pension assets | 4,584 | 5,002 |
Current liabilities—compensation and benefits | (119) | (121) |
Noncurrent liabilities—retirement and nonpension postretirement benefit obligations | (1,262) | (1,281) |
Funded status—net | 3,202 | 3,600 |
Pension Plan | Non-U.S. Plans | ||
Net funded status recognized in the Consolidated Balance Sheet | ||
Prepaid pension assets | 2,923 | 3,234 |
Current liabilities—compensation and benefits | (366) | (347) |
Noncurrent liabilities—retirement and nonpension postretirement benefit obligations | (6,977) | (5,777) |
Funded status—net | (4,420) | (2,891) |
Other Postretirement Benefits Plan | United States | ||
Net funded status recognized in the Consolidated Balance Sheet | ||
Prepaid pension assets | 0 | 0 |
Current liabilities—compensation and benefits | (202) | (307) |
Noncurrent liabilities—retirement and nonpension postretirement benefit obligations | (2,022) | (2,052) |
Funded status—net | (2,224) | (2,359) |
Other Postretirement Benefits Plan | Non-U.S. Plans | ||
Net funded status recognized in the Consolidated Balance Sheet | ||
Prepaid pension assets | 0 | 0 |
Current liabilities—compensation and benefits | (17) | (16) |
Noncurrent liabilities—retirement and nonpension postretirement benefit obligations | (547) | (486) |
Funded status—net | $ (564) | $ (501) |
Retirement-Related Benefits - O
Retirement-Related Benefits - OCI and AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Changes in AOCI for retirement-related benefits | |||||
Current period loss/(gain) | $ 3,115 | $ (878) | $ (2,433) | [1] | |
Curtailments and settlements | (5) | (5,970) | (94) | [1] | |
Amortization of net loss included in net periodic (income)/cost | (515) | (1,596) | (2,484) | [1] | |
Current period prior service costs/(credits) | (2) | (463) | 51 | [1] | |
Amortization of prior service (costs)/credits included in net periodic (income)/cost | 9 | (12) | (9) | [1] | |
Pension settlement charge | $ 5,900 | 0 | 5,894 | 0 | |
Pension Plan | United States | |||||
Changes in AOCI for retirement-related benefits | |||||
Net loss at beginning of period | 8,617 | 14,273 | |||
Current period loss/(gain) | 959 | 794 | |||
Curtailments and settlements | 0 | (5,923) | |||
Amortization of net loss included in net periodic (income)/cost | (109) | (527) | |||
Net loss at end of period | 9,467 | 8,617 | 14,273 | ||
Prior service costs/(credits) at beginning of period | 0 | 8 | |||
Current period prior service costs/(credits) | 0 | 0 | |||
Curtailments, settlements and other | 0 | 0 | |||
Amortization of prior service (costs)/credits included in net periodic (income)/cost | 0 | (8) | |||
Prior service costs/(credits) at end of period | 0 | 0 | 8 | ||
Transition (assets)/liabilities at beginning of period | 0 | 0 | |||
Transition (assets)/liabilities at end of period | 0 | 0 | 0 | ||
Total loss recognized in accumulated other comprehensive income/(loss) | 9,467 | 8,617 | |||
Pension settlement charge | $ 5,900 | 5,900 | |||
Pension Plan | Non-U.S. Plans | |||||
Changes in AOCI for retirement-related benefits | |||||
Net loss at beginning of period | 11,219 | 13,412 | |||
Current period loss/(gain) | 2,125 | (1,115) | |||
Curtailments and settlements | (7) | (47) | |||
Amortization of net loss included in net periodic (income)/cost | (400) | (1,031) | |||
Net loss at end of period | 12,937 | 11,219 | 13,412 | ||
Prior service costs/(credits) at beginning of period | 330 | 397 | |||
Current period prior service costs/(credits) | (1) | (53) | |||
Curtailments, settlements and other | 0 | 0 | |||
Amortization of prior service (costs)/credits included in net periodic (income)/cost | (20) | (14) | |||
Prior service costs/(credits) at end of period | 309 | 330 | 397 | ||
Transition (assets)/liabilities at beginning of period | 0 | 0 | |||
Transition (assets)/liabilities at end of period | 0 | 0 | 0 | ||
Total loss recognized in accumulated other comprehensive income/(loss) | 13,245 | 11,549 | |||
Other Postretirement Benefits Plan | United States | |||||
Changes in AOCI for retirement-related benefits | |||||
Net loss at beginning of period | 94 | 464 | |||
Current period loss/(gain) | (20) | (365) | |||
Curtailments and settlements | 0 | 0 | |||
Amortization of net loss included in net periodic (income)/cost | 0 | (5) | |||
Net loss at end of period | 73 | 94 | 464 | ||
Prior service costs/(credits) at beginning of period | (379) | 26 | |||
Current period prior service costs/(credits) | 0 | (415) | |||
Curtailments, settlements and other | 0 | 0 | |||
Amortization of prior service (costs)/credits included in net periodic (income)/cost | 29 | 10 | |||
Prior service costs/(credits) at end of period | (350) | (379) | 26 | ||
Transition (assets)/liabilities at beginning of period | 0 | 0 | |||
Transition (assets)/liabilities at end of period | 0 | 0 | 0 | ||
Total loss recognized in accumulated other comprehensive income/(loss) | (276) | (285) | |||
Other Postretirement Benefits Plan | Non-U.S. Plans | |||||
Changes in AOCI for retirement-related benefits | |||||
Net loss at beginning of period | 86 | 183 | |||
Current period loss/(gain) | 34 | (93) | |||
Curtailments and settlements | 2 | 0 | |||
Amortization of net loss included in net periodic (income)/cost | 1 | (4) | |||
Net loss at end of period | 123 | 86 | 183 | ||
Prior service costs/(credits) at beginning of period | 0 | (4) | |||
Current period prior service costs/(credits) | (1) | 5 | |||
Curtailments, settlements and other | 0 | 0 | |||
Amortization of prior service (costs)/credits included in net periodic (income)/cost | 0 | 0 | |||
Prior service costs/(credits) at end of period | (1) | 0 | (4) | ||
Transition (assets)/liabilities at beginning of period | 0 | 0 | |||
Transition (assets)/liabilities at end of period | 0 | 0 | $ 0 | ||
Total loss recognized in accumulated other comprehensive income/(loss) | $ 122 | $ 86 | |||
[1] Amounts presented have not been recast to exclude discontinued operations. |
Retirement-Related Benefits -_3
Retirement-Related Benefits - Assumptions (Details) | 4 Months Ended | 5 Months Ended | 7 Months Ended | 8 Months Ended | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2022 | Jul. 31, 2022 | Aug. 31, 2022 | Dec. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pension Plan | ||||||||
Expected Long-Term Returns on Plan Assets | ||||||||
Period over which changes in fair value of plan assets recognized | 5 years | |||||||
Pension Plan | United States | ||||||||
Weighted-average assumptions used to measure net periodic (income)/cost for the year ended December 31 | ||||||||
Discount rate | 5.30% | 3.30% | 2.20% | |||||
Expected long-term returns on plan assets | 5.50% | 4.33% | 3.75% | |||||
Interest crediting rate | 4.40% | 2.07% | 1.10% | |||||
Weighted-average assumptions used to measure benefit obligations at December 31 | ||||||||
Discount rate | 5.30% | 5.30% | 5% | 5.30% | 2.60% | |||
Rate of compensation increase | 5% | |||||||
Interest crediting rate | 4.40% | 4.40% | 3.80% | 4.40% | 1.10% | |||
Pension Plan | United States | Forecast | ||||||||
Weighted-average assumptions used to measure net periodic (income)/cost for the year ended December 31 | ||||||||
Expected long-term returns on plan assets | 5% | |||||||
Pension Plan | Non-U.S. Plans | ||||||||
Weighted-average assumptions used to measure net periodic (income)/cost for the year ended December 31 | ||||||||
Discount rate | 3.80% | 1.26% | 0.87% | |||||
Expected long-term returns on plan assets | 4.44% | 2.97% | 2.85% | |||||
Rate of compensation increase | 4% | 3.02% | 2.59% | |||||
Interest crediting rate | 0.34% | 0.26% | 0.26% | |||||
Weighted-average assumptions used to measure benefit obligations at December 31 | ||||||||
Discount rate | 3.80% | 3.80% | 3.36% | 3.80% | 1.26% | |||
Rate of compensation increase | 4% | 4% | 4.18% | 4% | 3.02% | |||
Interest crediting rate | 0.34% | 0.34% | 0.28% | 0.34% | 0.26% | |||
Pension Plan | Non-U.S. Plans | Forecast | ||||||||
Weighted-average assumptions used to measure net periodic (income)/cost for the year ended December 31 | ||||||||
Expected long-term returns on plan assets | 4.90% | |||||||
Pension Plan | Remeasurement Period One | United States | ||||||||
Weighted-average assumptions used to measure benefit obligations at December 31 | ||||||||
Discount rate, pre-remeasurement adjustment | 2.60% | |||||||
Expected long-term returns on plan assets, pre-remeasurement adjustment | 4% | |||||||
Interest crediting rate, pre-remeasurement adjustment | 1.10% | |||||||
Discount rate, post-remeasurement adjustment | 4.70% | |||||||
Expected long-term returns on plan assets, post-remeasurement adjustment | 5% | |||||||
Interest crediting rate, post-remeasurement adjustment | 4% | |||||||
Other Postretirement Benefits Plan | United States | ||||||||
Weighted-average assumptions used to measure net periodic (income)/cost for the year ended December 31 | ||||||||
Discount rate | 5.30% | 3.05% | 1.80% | |||||
Interest crediting rate | 4.40% | 2.16% | 1.10% | |||||
Weighted-average assumptions used to measure benefit obligations at December 31 | ||||||||
Discount rate | 5.30% | 5.30% | 5% | 5.30% | 2.30% | |||
Interest crediting rate | 4.40% | 4.40% | 3.80% | 4.40% | 1.10% | |||
Other Postretirement Benefits Plan | Non-U.S. Plans | ||||||||
Weighted-average assumptions used to measure net periodic (income)/cost for the year ended December 31 | ||||||||
Discount rate | 7.25% | 5.35% | 4.55% | |||||
Expected long-term returns on plan assets | 8.05% | 6.64% | 6.62% | |||||
Weighted-average assumptions used to measure benefit obligations at December 31 | ||||||||
Discount rate | 7.25% | 7.25% | 7.66% | 7.25% | 5.35% | |||
Other Postretirement Benefits Plan | Remeasurement Period Two | United States | ||||||||
Weighted-average assumptions used to measure benefit obligations at December 31 | ||||||||
Discount rate, pre-remeasurement adjustment | 2.30% | |||||||
Interest crediting rate, pre-remeasurement adjustment | 1.10% | |||||||
Discount rate, post-remeasurement adjustment | 4.10% | |||||||
Interest crediting rate, post-remeasurement adjustment | 3.65% | |||||||
Postretirement Health Coverage | ||||||||
Healthcare Cost Trend Rate | ||||||||
Health care cost trend rate assumed for next fiscal year | 6.69% | |||||||
Ultimate healthcare cost trend rate | (4.50%) | |||||||
Period for ultimate trend rate | 14 years |
Retirement-Related Benefits - I
Retirement-Related Benefits - Investment Strategy (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
United States | Personal Pension Plan (PPP) | Equity securities | |
Investment Policies And Strategies | |
Target allocation (as a percent) | 8% |
United States | Personal Pension Plan (PPP) | Fixed-income securities | |
Investment Policies And Strategies | |
Target allocation (as a percent) | 83% |
United States | Personal Pension Plan (PPP) | Real estate | |
Investment Policies And Strategies | |
Target allocation (as a percent) | 3% |
United States | Personal Pension Plan (PPP) | Other investments | |
Investment Policies And Strategies | |
Target allocation (as a percent) | 6% |
United States | Personal Pension Plan (PPP) | Private equities and private real estate investments | |
Investment Policies And Strategies | |
Fair Value of plan assets | $ 1,717 |
Commitments for future investments in private markets | $ 866 |
Non-U.S. Plans | Maximum | |
Investment Policies And Strategies | |
Percentage of board members, elected by employees and retirees for managing investments (as a percent) | 50% |
Non-U.S. Plans | Equity securities | |
Investment Policies And Strategies | |
Target allocation (as a percent) | 16% |
Non-U.S. Plans | Fixed-income securities | |
Investment Policies And Strategies | |
Target allocation (as a percent) | 63% |
Non-U.S. Plans | Real estate | |
Investment Policies And Strategies | |
Target allocation (as a percent) | 3% |
Non-U.S. Plans | Other investments | |
Investment Policies And Strategies | |
Target allocation (as a percent) | 5% |
Non-U.S. Plans | Insurance contracts | |
Investment Policies And Strategies | |
Target allocation (as a percent) | 13% |
Retirement-Related Benefits -_4
Retirement-Related Benefits - Plan Assets (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
United States | Level 3 | Personal Pension Plan (PPP) | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | $ 722 | $ 1,142 | $ 598 |
United States | Level 3 | Corporate Bonds | Personal Pension Plan (PPP) | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 709 | 721 | 598 |
United States | Level 3 | Private Equity | Personal Pension Plan (PPP) | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 13 | 421 | 0 |
Non-U.S. Plans | Level 3 | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 78 | 155 | 174 |
Non-U.S. Plans | Level 3 | Fixed income mutual funds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 75 | 9 | 0 |
Non-U.S. Plans | Level 3 | Real estate | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 4 | 145 | 174 |
Pension Plan | United States | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 24,437 | 25,094 | 51,852 |
Pension Plan | United States | Equity securities | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 631 | 518 | |
Pension Plan | United States | Equity securities | Personal Pension Plan (PPP) | |||
Retirement-Related Benefits | |||
Value of IBM securities included in plan assets | 1 | 1 | |
Pension Plan | United States | Equity mutual funds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 155 | 114 | |
Pension Plan | United States | Government and related | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 9,861 | 9,074 | |
Pension Plan | United States | Corporate Bonds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 7,783 | 7,606 | |
Value of IBM securities included in plan assets | 16 | 6 | |
Pension Plan | United States | Mortgage and asset-backed securities | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 178 | 238 | |
Pension Plan | United States | Fixed income mutual funds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 251 | 234 | |
Pension Plan | United States | Insurance contracts | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | United States | Cash and short-term investments | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 614 | 643 | |
Pension Plan | United States | Private Equity | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 13 | 421 | |
Pension Plan | United States | Real estate | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 8 | |
Pension Plan | United States | Derivatives | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | United States | Other mutual funds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | United States | Other | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | (4) | |
Pension Plan | United States | Level 1,2 and 3 | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 19,485 | 18,855 | |
Pension Plan | United States | Level 1 | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 1,532 | 937 | |
Pension Plan | United States | Level 1 | Equity securities | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 631 | 518 | |
Pension Plan | United States | Level 1 | Equity mutual funds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 155 | 114 | |
Pension Plan | United States | Level 1 | Government and related | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | United States | Level 1 | Corporate Bonds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | United States | Level 1 | Mortgage and asset-backed securities | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | United States | Level 1 | Fixed income mutual funds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 251 | 234 | |
Pension Plan | United States | Level 1 | Insurance contracts | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | United States | Level 1 | Cash and short-term investments | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 495 | 72 | |
Pension Plan | United States | Level 1 | Private Equity | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | United States | Level 1 | Real estate | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | United States | Level 1 | Derivatives | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | United States | Level 1 | Other mutual funds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | United States | Level 2 | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 17,231 | 16,776 | |
Pension Plan | United States | Level 2 | Equity securities | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | United States | Level 2 | Equity mutual funds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | United States | Level 2 | Government and related | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 9,861 | 9,074 | |
Pension Plan | United States | Level 2 | Corporate Bonds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 7,074 | 6,885 | |
Pension Plan | United States | Level 2 | Mortgage and asset-backed securities | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 178 | 238 | |
Pension Plan | United States | Level 2 | Fixed income mutual funds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | United States | Level 2 | Insurance contracts | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | United States | Level 2 | Cash and short-term investments | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 119 | 570 | |
Pension Plan | United States | Level 2 | Private Equity | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | United States | Level 2 | Real estate | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 8 | |
Pension Plan | United States | Level 2 | Derivatives | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | United States | Level 2 | Other mutual funds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | United States | Level 3 | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 722 | 1,142 | |
Pension Plan | United States | Level 3 | Equity securities | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | United States | Level 3 | Equity mutual funds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | United States | Level 3 | Government and related | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | United States | Level 3 | Corporate Bonds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 709 | 721 | |
Pension Plan | United States | Level 3 | Mortgage and asset-backed securities | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | United States | Level 3 | Fixed income mutual funds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | United States | Level 3 | Insurance contracts | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | United States | Level 3 | Cash and short-term investments | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | United States | Level 3 | Private Equity | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 13 | 421 | |
Pension Plan | United States | Level 3 | Real estate | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | United States | Level 3 | Derivatives | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | United States | Level 3 | Other mutual funds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | United States | Fair Value Measured at Net Asset Value Per Share | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 4,952 | 6,242 | |
Pension Plan | Non-U.S. Plans | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 29,059 | 28,371 | 39,979 |
Pension Plan | Non-U.S. Plans | Equity securities | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 243 | 247 | |
Value of IBM securities included in plan assets | 2 | 2 | |
Pension Plan | Non-U.S. Plans | Equity mutual funds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 5 | 0 | |
Pension Plan | Non-U.S. Plans | Government and related | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 7,700 | 6,837 | |
Pension Plan | Non-U.S. Plans | Corporate Bonds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 2,691 | 2,546 | |
Value of IBM securities included in plan assets | 5 | 3 | |
Pension Plan | Non-U.S. Plans | Mortgage and asset-backed securities | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 9 | 2 | |
Pension Plan | Non-U.S. Plans | Fixed income mutual funds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 75 | 9 | |
Pension Plan | Non-U.S. Plans | Insurance contracts | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 3,774 | 3,654 | |
Pension Plan | Non-U.S. Plans | Cash and short-term investments | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 579 | 549 | |
Pension Plan | Non-U.S. Plans | Private Equity | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Real estate | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 4 | 145 | |
Pension Plan | Non-U.S. Plans | Derivatives | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 309 | 294 | |
Pension Plan | Non-U.S. Plans | Other mutual funds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 20 | 25 | |
Pension Plan | Non-U.S. Plans | Other | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | (59) | (78) | |
Pension Plan | Non-U.S. Plans | Level 1,2 and 3 | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 15,409 | 14,308 | |
Pension Plan | Non-U.S. Plans | Level 1 | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 584 | 590 | |
Pension Plan | Non-U.S. Plans | Level 1 | Equity securities | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 243 | 247 | |
Pension Plan | Non-U.S. Plans | Level 1 | Equity mutual funds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 5 | 0 | |
Pension Plan | Non-U.S. Plans | Level 1 | Government and related | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 1 | Corporate Bonds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 1 | Mortgage and asset-backed securities | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 1 | Fixed income mutual funds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 1 | Insurance contracts | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 1 | Cash and short-term investments | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 264 | 286 | |
Pension Plan | Non-U.S. Plans | Level 1 | Private Equity | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 1 | Real estate | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 1 | Derivatives | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 51 | 32 | |
Pension Plan | Non-U.S. Plans | Level 1 | Other mutual funds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 20 | 25 | |
Pension Plan | Non-U.S. Plans | Level 2 | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 14,747 | 13,563 | |
Pension Plan | Non-U.S. Plans | Level 2 | Equity securities | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 2 | Equity mutual funds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 2 | Government and related | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 7,700 | 6,837 | |
Pension Plan | Non-U.S. Plans | Level 2 | Corporate Bonds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 2,691 | 2,546 | |
Pension Plan | Non-U.S. Plans | Level 2 | Mortgage and asset-backed securities | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 9 | 2 | |
Pension Plan | Non-U.S. Plans | Level 2 | Fixed income mutual funds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 2 | Insurance contracts | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 3,774 | 3,654 | |
Pension Plan | Non-U.S. Plans | Level 2 | Cash and short-term investments | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 315 | 263 | |
Pension Plan | Non-U.S. Plans | Level 2 | Private Equity | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 2 | Real estate | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 2 | Derivatives | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 258 | 262 | |
Pension Plan | Non-U.S. Plans | Level 2 | Other mutual funds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 3 | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 78 | 155 | |
Pension Plan | Non-U.S. Plans | Level 3 | Equity securities | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 3 | Equity mutual funds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 3 | Government and related | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 3 | Corporate Bonds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 3 | Mortgage and asset-backed securities | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 3 | Fixed income mutual funds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 75 | 9 | |
Pension Plan | Non-U.S. Plans | Level 3 | Insurance contracts | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 3 | Cash and short-term investments | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 3 | Private Equity | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 3 | Real estate | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 4 | 145 | |
Pension Plan | Non-U.S. Plans | Level 3 | Derivatives | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Level 3 | Other mutual funds | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 0 | 0 | |
Pension Plan | Non-U.S. Plans | Fair Value Measured at Net Asset Value Per Share | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 13,709 | 14,141 | |
Other Postretirement Benefits Plan | United States | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 10 | 10 | 8 |
Other Postretirement Benefits Plan | United States | Level 1 | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 10 | 10 | |
Other Postretirement Benefits Plan | Non-U.S. Plans | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | 23 | 29 | $ 31 |
Other Postretirement Benefits Plan | Non-U.S. Plans | Level 2 | |||
Retirement-Related Benefits | |||
Fair Value of plan assets | $ 23 | $ 29 |
Retirement-Related Benefits - L
Retirement-Related Benefits - Level 3 Reconciliation (Details) - Level 3 - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
United States | Personal Pension Plan (PPP) | ||
Change in plan assets | ||
Fair value of plan assets, balance at beginning of period | $ 1,142 | $ 598 |
Return on assets held at end of year | (23) | (114) |
Return on assets sold during the year | 10 | (2) |
Purchases, sales and settlements, net | (409) | 206 |
Transfers, net | 2 | 454 |
Fair value of plan assets, balance at end of period | 722 | 1,142 |
United States | Personal Pension Plan (PPP) | Corporate Bonds | ||
Change in plan assets | ||
Fair value of plan assets, balance at beginning of period | 721 | 598 |
Return on assets held at end of year | (18) | (114) |
Return on assets sold during the year | 10 | (2) |
Purchases, sales and settlements, net | (5) | 206 |
Transfers, net | 2 | 33 |
Fair value of plan assets, balance at end of period | 709 | 721 |
United States | Personal Pension Plan (PPP) | Private Equity | ||
Change in plan assets | ||
Fair value of plan assets, balance at beginning of period | 421 | 0 |
Return on assets held at end of year | (5) | 0 |
Return on assets sold during the year | 0 | 0 |
Purchases, sales and settlements, net | (404) | 0 |
Transfers, net | 0 | 421 |
Fair value of plan assets, balance at end of period | 13 | 421 |
Non-U.S. Plans | ||
Change in plan assets | ||
Fair value of plan assets, balance at beginning of period | 155 | 174 |
Return on assets held at end of year | (65) | 6 |
Return on assets sold during the year | 56 | (1) |
Purchases, sales and settlements, net | (74) | (7) |
Transfers, net | 0 | 0 |
Foreign exchange impact | 7 | (19) |
Fair value of plan assets, balance at end of period | 78 | 155 |
Non-U.S. Plans | Fixed income mutual funds | ||
Change in plan assets | ||
Fair value of plan assets, balance at beginning of period | 9 | 0 |
Return on assets held at end of year | 1 | 0 |
Return on assets sold during the year | 0 | 0 |
Purchases, sales and settlements, net | 63 | 10 |
Transfers, net | 0 | 0 |
Foreign exchange impact | 2 | 0 |
Fair value of plan assets, balance at end of period | 75 | 9 |
Non-U.S. Plans | Real estate | ||
Change in plan assets | ||
Fair value of plan assets, balance at beginning of period | 145 | 174 |
Return on assets held at end of year | (66) | 6 |
Return on assets sold during the year | 56 | (1) |
Purchases, sales and settlements, net | (137) | (16) |
Transfers, net | 0 | 0 |
Foreign exchange impact | 5 | (18) |
Fair value of plan assets, balance at end of period | $ 4 | $ 145 |
Retirement-Related Benefits -_5
Retirement-Related Benefits - Contributions and Direct Benefit Payments (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Retirement-Related Benefits | ||
Total | $ 1,847 | $ 1,962 |
Trust for Benefit of Employees | ||
Retirement-Related Benefits | ||
Contributions by employer - Noncash | 682 | 557 |
Non-U.S. DB plans | ||
Retirement-Related Benefits | ||
Total | 57 | 103 |
Multi-employer plans | ||
Retirement-Related Benefits | ||
Total | 13 | 15 |
DC plans | ||
Retirement-Related Benefits | ||
Total | 991 | 924 |
Direct benefit payments | ||
Retirement-Related Benefits | ||
Total | 552 | 576 |
Other Postretirement Benefits Plan | ||
Retirement-Related Benefits | ||
Total | 233 | 344 |
Other Postretirement Benefits Plan | Non-U.S. DB plans | ||
Retirement-Related Benefits | ||
Contributions by employer - Noncash | $ 256 | $ 349 |
Retirement-Related Benefits -_6
Retirement-Related Benefits - Contributions, Defined Benefit Pension Plans (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Retirement-Related Benefits | ||
Total | $ 1,847 | $ 1,962 |
Pension Plans, Including Multi-employer Plans | Non-U.S. Plans | ||
Retirement-Related Benefits | ||
Estimated cash contributions to the defined benefit plans in next fiscal year | $ 200 |
Retirement-Related Benefits - E
Retirement-Related Benefits - Expected Benefit Payments (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Pension Plan | |
Expected Benefit Payments | |
2024 | $ 4,260 |
2025 | 4,286 |
2026 | 4,283 |
2027 | 4,225 |
2028 | 4,145 |
2029-2033 | 19,591 |
Other Postretirement Benefits Plan | |
Expected Benefit Payments | |
2024 | 261 |
2025 | 260 |
2026 | 259 |
2027 | 255 |
2028 | 281 |
2029-2033 | 1,349 |
United States | Pension Plan | Qualified Plan | |
Expected Benefit Payments | |
2024 | 1,769 |
2025 | 1,830 |
2026 | 1,848 |
2027 | 1,822 |
2028 | 1,780 |
2029-2033 | 8,284 |
United States | Pension Plan | Nonqualified Plan | |
Expected Benefit Payments | |
2024 | 122 |
2025 | 121 |
2026 | 119 |
2027 | 116 |
2028 | 113 |
2029-2033 | 522 |
United States | Other Postretirement Benefits Plan | |
Expected Benefit Payments | |
2024 | 217 |
2025 | 215 |
2026 | 213 |
2027 | 208 |
2028 | 233 |
2029-2033 | 1,085 |
Non-U.S. Plans | Pension Plan | Qualified Plan | |
Expected Benefit Payments | |
2024 | 1,995 |
2025 | 1,977 |
2026 | 1,954 |
2027 | 1,933 |
2028 | 1,903 |
2029-2033 | 9,131 |
Non-U.S. Plans | Pension Plan | Nonqualified Plan | |
Expected Benefit Payments | |
2024 | 375 |
2025 | 359 |
2026 | 362 |
2027 | 354 |
2028 | 349 |
2029-2033 | 1,654 |
Non-U.S. Plans | Other Postretirement Benefits Plan | Qualified Plan | |
Expected Benefit Payments | |
2024 | 20 |
2025 | 21 |
2026 | 22 |
2027 | 23 |
2028 | 24 |
2029-2033 | 134 |
Non-U.S. Plans | Other Postretirement Benefits Plan | Nonqualified Plan | |
Expected Benefit Payments | |
2024 | 24 |
2025 | 24 |
2026 | 24 |
2027 | 24 |
2028 | 24 |
2029-2033 | $ 129 |
Retirement-Related Benefits -_7
Retirement-Related Benefits - ABO and APBO in Excess of Plan Assets (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Pension Plan | ||
Defined Benefit Plan, Pension and Non-Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets | ||
Plans with PBO in excess of plan assets, Benefit Obligation | $ 18,345 | $ 17,220 |
Plans with PBO in excess of plan assets, Plan Assets | 9,621 | 9,694 |
Plans with ABO in excess of plan assets, Benefit Obligation | 18,029 | 16,979 |
Plans with ABO in excess of plan assets, Plan Assets | 9,604 | 9,694 |
Plans with assets in excess of PBO, Benefit Obligation | 36,369 | 35,534 |
Plans with assets in excess of PBO, Plan Assets | 43,875 | 43,770 |
Other Postretirement Benefits Plan | ||
Defined Benefit Plan, Pension and Non-Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets | ||
Plans with APBO in excess of plan assets, Benefit Obligation | 2,820 | 2,893 |
Plans with APBO in excess of plan assets, Plan Assets | 32 | 32 |
Plans with plan assets in excess of APBO, Benefit Obligation | 0 | 7 |
Plans with plan assets in excess of APBO, Plan Assets | $ 0 | $ 7 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - USD ($) $ / shares in Units, $ in Billions | Feb. 05, 2024 | Jan. 30, 2024 |
Subsequent Events | ||
Dividend declared (in dollars per share) | $ 1.66 | |
US dollar, fixed-rate notes issued 2024 | ||
Subsequent Events | ||
Aggregate amount of debt issued | $ 5.5 | |
US dollar, fixed-rate notes issued 2024 | Minimum | ||
Subsequent Events | ||
Credit facility term | 2 years | |
Coupon rate (as a percent) | 4.60% | |
US dollar, fixed-rate notes issued 2024 | Maximum | ||
Subsequent Events | ||
Credit facility term | 30 years | |
Coupon rate (as a percent) | 5.30% |
SCHEDULE II VALUATION AND QUA_2
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS AND RESERVES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Allowance for Credit Losses - Current | |||
Movement in Valuation and Qualifying Accounts and Reserves | |||
Balance at Beginning of Period | $ 467 | $ 418 | $ 503 |
Additions/ (Deductions) | 13 | 59 | (35) |
Write-offs | (97) | (55) | (46) |
Foreign Currency and Other | 48 | 45 | (4) |
Balance at End of Period | 431 | 467 | 418 |
Allowance for Credit Losses - Noncurrent | |||
Movement in Valuation and Qualifying Accounts and Reserves | |||
Balance at Beginning of Period | 28 | 25 | 47 |
Additions/ (Deductions) | (2) | 6 | (21) |
Write-offs | 0 | 0 | 0 |
Foreign Currency and Other | 0 | (2) | (2) |
Balance at End of Period | 27 | 28 | 25 |
Allowance For Inventory Losses | |||
Movement in Valuation and Qualifying Accounts and Reserves | |||
Balance at Beginning of Period | 631 | 633 | 514 |
Additions/ (Deductions) | 201 | 162 | 240 |
Write-offs | (183) | (148) | (118) |
Foreign Currency and Other | 9 | (15) | (3) |
Balance at End of Period | 658 | 631 | 633 |
Revenue Based Provisions | |||
Movement in Valuation and Qualifying Accounts and Reserves | |||
Balance at Beginning of Period | 424 | 435 | 372 |
Additions/ (Deductions) | 500 | 620 | 627 |
Write-offs | (456) | (629) | (574) |
Foreign Currency and Other | 12 | (2) | 10 |
Balance at End of Period | $ 480 | $ 424 | $ 435 |