International Business Machines (IBM) 10-Q 27 Apr 21 2021 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information	3 Months Ended
	Mar. 31, 2021shares
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2021
Entity File Number	1-2360
Entity Registrant Name	INTERNATIONAL BUSINESS MACHINES CORPORATION
Entity Incorporation, State or Country Code	NY
Entity Tax Identification Number	13-0871985
Entity Address, Address Line One	One New Orchard Road
Entity Address, City or Town	Armonk
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10504
City Area Code	914
Local Phone Number	499-1900
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Central Index Key	0000051143
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding	893,522,828
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
New York Stock Exchange | 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 | 0.500% Notes due 2021
Document Information [Line Items]
Title of 12(b) Security	0.500%  Notes due 2021
Trading Symbol	IBM 21B
Security Exchange Name	NYSE
New York Stock Exchange | 2.625% Notes due 2022
Document Information [Line Items]
Title of 12(b) Security	2.625%  Notes due 2022
Trading Symbol	IBM 22A
Security Exchange Name	NYSE
New York Stock Exchange | 1.250% Notes due 2023
Document Information [Line Items]
Title of 12(b) Security	1.250%  Notes due 2023
Trading Symbol	IBM 23A
Security Exchange Name	NYSE
New York Stock Exchange | 0.375% Notes due 2023
Document Information [Line Items]
Title of 12(b) Security	0.375%  Notes due 2023
Trading Symbol	IBM 23B
Security Exchange Name	NYSE
New York Stock Exchange | 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 | 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 | 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 | 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 | 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 | 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 | 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 | 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 | 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 | 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 | 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 | 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 | 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 | 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 | 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 | 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 | 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
Chicago Stock Exchange | Common Stock
Document Information [Line Items]
Title of 12(b) Security	Capital stock, par value $.20 per share
Trading Symbol	IBM
Security Exchange Name	CHX

CONSOLIDATED INCOME STATEMENT

CONSOLIDATED INCOME STATEMENT - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Revenue	$ 17,730	$ 17,571
Cost	9,525	9,649
Gross profit	8,204	7,922
Expense and other (income)
Selling, general and administrative	5,174	5,955
Research, development and engineering	1,630	1,625
Intellectual property and custom development income	(147)	(116)
Other (income) and expense	362	182
Interest expense	280	326
Total expense and other (income)	7,299	7,972
Income/(loss) from continuing operations before income taxes	905	(49)
Provision for/(benefit from) income taxes	(51)	(1,226)
Income from continuing operations	956	1,176
Income/(loss) from discontinued operations, net of tax	(1)	(1)
Net income	$ 955	$ 1,175
Assuming dilution
Continuing operations (in dollars per share)	$ 1.06	$ 1.31
Discontinued operations (in dollars per share)	0	0
Total (in dollars per share)	1.06	1.31
Basic
Continuing operations (in dollars per share)	1.07	1.32
Discontinued operations (in dollars per share)	0	0
Total (in dollars per share)	$ 1.07	$ 1.32
Weighted-average number of common shares outstanding
Assuming dilution (in shares)	901,746,065	895,039,238
Basic (in shares)	893,630,916	887,969,345
Services
Revenue	$ 11,404	$ 11,373
Cost	7,775	7,843
Sales
Revenue	6,083	5,895
Cost	1,585	1,624
Financing
Revenue	242	302
Cost	$ 165	$ 181

CONSOLIDATED STATEMENT OF COMPR

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Net income	$ 955	$ 1,175
Other comprehensive income/(loss), before tax
Foreign currency translation adjustments	549	(919)
Net changes related to available-for-sale securities
Unrealized gains/(losses) arising during the period	0	0
Total net changes related to available-for-sale securities	0	0
Unrealized gains/(losses) on cash flow hedges
Unrealized gains/(losses) arising during the period	187	(180)
Reclassification of (gains)/losses to net income	160	91
Total unrealized gains/(losses) on cash flow hedges	347	(90)
Retirement-related benefit plans
Prior service costs/(credits)	0	(4)
Net (losses)/gains arising during the period	20	8
Curtailments and settlements	17	8
Amortization of prior service (credits)/costs	3	1
Amortization of net (gains)/losses	648	570
Total retirement-related benefit plans	689	582
Other comprehensive income/(loss), before tax	1,586	(427)
Income tax (expense)/benefit related to items of other comprehensive income	(505)	(260)
Other comprehensive income/(loss)	1,080	(686)
Total comprehensive income/(loss)	$ 2,036	$ 489

CONSOLIDATED BALANCE SHEET

CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Current assets
Cash and cash equivalents	$ 10,531	$ 13,212
Restricted cash	142	463
Marketable securities	600	600
Notes and accounts receivable-trade (net of allowances of $345 in 2021 and $351 in 2020)	6,458	7,132
Short-term financing receivables (net of allowances of $200 in 2021 and $218 in 2020)	8,822	10,892
Other accounts receivable (net of allowances of $16 in 2021 and $28 in 2020)	787	714
Inventories, at lower of average cost or net realizable value:
Finished goods	234	190
Work in process and raw materials	1,594	1,649
Total inventory	1,828	1,839
Deferred costs	2,223	2,107
Prepaid expenses and other current assets	2,647	2,206
Total current assets	34,038	39,165
Property, plant and equipment	32,269	33,176
Less: Accumulated depreciation	22,817	23,136
Property, plant and equipment - net	9,452	10,040
Operating right-of-use assets-net	4,483	4,686
Long-term financing receivables (net of allowances of $36 in 2021 and $45 in 2020)	5,922	7,086
Prepaid pension assets	7,800	7,610
Deferred costs	2,336	2,449
Deferred taxes	8,953	9,241
Goodwill	59,984	59,617
Intangible assets-net	13,535	13,796
Investments and sundry assets	2,125	2,282
Total assets	148,629	155,971
Current liabilities
Taxes	2,640	3,301
Short-term debt	5,198	7,183
Accounts payable	4,140	4,908
Compensation and benefits	3,256	3,440
Deferred income	14,197	12,833
Operating lease liabilities	1,337	1,357
Other accrued expenses and liabilities	5,775	6,847
Total current liabilities	36,542	39,869
Long-term debt	51,206	54,355
Retirement and nonpension postretirement benefit obligations	17,346	18,248
Deferred income	4,153	4,301
Operating lease liabilities	3,379	3,574
Other liabilities	14,489	14,897
Total liabilities	127,116	135,244
IBM stockholders' equity
Common stock, par value $.20 per share, and additional paid-in capital Shares authorized: 4,687,500,000 Shares issued (2021-2,244,015,188; 2020-2,242,969,004	56,788	56,556
Retained earnings	162,218	162,717
Treasury stock, at cost (shares: 2021-1,350,492,360; 2020-1,350,315,580)	(169,360)	(169,339)
Accumulated other comprehensive income/(loss)	(28,257)	(29,337)
Total IBM stockholders' equity	21,389	20,597
Noncontrolling interests	124	129
Total equity	21,513	20,727
Total liabilities and equity	$ 148,629	$ 155,971

CONSOLIDATED BALANCE SHEET (Par

CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
CONSOLIDATED BALANCE SHEET
Notes and accounts receivable - trade, allowances	$ 345	$ 351
Short-term financing receivables, allowances	200	218
Other accounts receivable, allowances	16	28
Long-term financing receivables, allowances	$ 36	$ 45
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)	2,244,015,188	2,242,969,004
Treasury stock, Shares (in shares)	1,350,492,360	1,350,315,580

CONSOLIDATED STATEMENT OF CASH

CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cash flows from operating activities
Net income	$ 955	$ 1,175
Adjustments to reconcile net income to cash provided by operating activities
Depreciation	1,052	1,012
Amortization of intangibles	620	622
Stock-based compensation	213	189
Net (gain)/loss on asset sales and other	7	315
Changes in operating assets and liabilities, net of acquisitions/divestitures	2,066	1,162
Net cash provided by operating activities	4,914	4,476
Cash flows from investing activities
Payments for property, plant and equipment	(494)	(630)
Proceeds from disposition of property, plant and equipment	139	46
Investment in software	(175)	(153)
Acquisition of businesses, net of cash acquired	(1,120)	(13)
Divestiture of businesses, net of cash transferred	(15)	26
Non-operating finance receivables - net	(9)	(20)
Purchases of marketable securities and other investments	(875)	(1,096)
Proceeds from disposition of marketable securities and other investments	549	938
Net cash provided by/(used in) investing activities	(2,000)	(902)
Cash flows from financing activities
Proceeds from new debt	51	6,055
Payments to settle debt	(4,261)	(5,285)
Short-term borrowings/(repayments) less than 90 days - net	(89)	586
Common stock repurchases for tax withholdings	(41)	(44)
Financing - other	15	13
Cash dividends paid	(1,457)	(1,440)
Net cash provided by/(used in) financing activities	(5,783)	(115)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(134)	(403)
Net change in cash, cash equivalents and restricted cash	(3,002)	3,057
Cash, cash equivalents and restricted cash at January 1	13,675	8,314
Cash, cash equivalents and restricted cash at December 31	$ 10,673	$ 11,371

CONSOLIDATED STATEMENT OF EQUIT

CONSOLIDATED STATEMENT OF EQUITY - USD ($) $ in Millions	Total IBM Stockholders' EquityCumulative Effect, Period of Adoption, Adjustment	[1]	Total IBM Stockholders' Equity	Common Stock and Additional Paid-in Capital	Retained EarningsCumulative Effect, Period of Adoption, Adjustment	[1]	Retained Earnings	Treasury Stock	Accumulated Other Comprehensive Income/(Loss)	Non-Controlling Interests	Cumulative Effect, Period of Adoption, Adjustment	[1]	Total
Balance at the Beginning of the Period at Dec. 31, 2019	$ (66)		$ 20,841	$ 55,895	$ (66)		$ 162,954	$ (169,413)	$ (28,597)	$ 144	$ (66)		$ 20,985
Net income plus other comprehensive income/(loss):
Net income			1,175				1,175						1,175
Other comprehensive income/(loss)			(686)						(686)				(686)
Total comprehensive income/(loss)			489										489
Cash dividends paid - common stock			(1,440)				(1,440)						(1,440)
Common stock issued under employee plans			197	197									197
Purchases and sales of treasury stock under employee plans - net			(21)				3	(24)					(21)
Changes in noncontrolling interests										(15)			(15)
Balance at the End of the Period at Mar. 31, 2020			19,999	56,092			162,626	(169,437)	(29,283)	129			20,128
Balance at the Beginning of the Period at Dec. 31, 2020			20,597	56,556			162,717	(169,339)	(29,337)	129			20,727
Net income plus other comprehensive income/(loss):
Net income			955				955						955
Other comprehensive income/(loss)			1,080						1,080				1,080
Total comprehensive income/(loss)			2,036										2,036
Cash dividends paid - common stock			(1,457)				(1,457)						(1,457)
Common stock issued under employee plans			232	232									232
Purchases and sales of treasury stock under employee plans - net			(18)				2	(21)					(18)
Changes in noncontrolling interests										(6)			(6)
Balance at the End of the Period at Mar. 31, 2021			$ 21,389	$ 56,788			$ 162,218	$ (169,360)	$ (28,257)	$ 124			$ 21,513
[1]	Reflects the adoption of the FASB guidance on credit losses. Refer to note 2, “Accounting Changes.”

CONSOLIDATED STATEMENT OF EQU_2

CONSOLIDATED STATEMENT OF EQUITY (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
CONSOLIDATED STATEMENT OF EQUITY
Cash dividend per common share	$ 1.63	$ 1.62
Common stock issued under employee plans (in shares)	1,046,184	935,486
Purchases of treasury stock under employee plans (in shares)	339,506	310,454
Sales of treasury stock under employee plans (in shares)	162,726	156,471

Basis of Presentation

Basis of Presentation	3 Months Ended
	Mar. 31, 2021
Basis of Presentation
Basis of Presentation	1. Basis of Presentation: The accompanying Consolidated Financial Statements and footnotes of the International Business Machines Corporation (IBM or the company) have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The financial statements and footnotes are unaudited. In the opinion of the company’s management, these statements include all adjustments, which are only of a normal recurring nature, necessary to present a fair statement of the company’s results of operations, financial position and cash flows. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amount of assets, liabilities, revenue, costs, expenses and other comprehensive income/(loss) that are reported in the Consolidated Financial Statements and accompanying disclosures. These estimates are based on management’s best knowledge of current events, historical experience, actions that the company may undertake in the future and on various other assumptions that are believed to be reasonable under the circumstances, including the macroeconomic impacts of the COVID-19 pandemic. As a result, actual results may be different from these estimates. On October 8, 2020, the company announced that it will separate the managed infrastructure services unit of its Global Technology Services (GTS) segment into a new public company. The managed infrastructure services unit is comprised of outsourcing and other infrastructure modernization and management services and the name of the new company will be Kyndryl. The separation is expected to be achieved through a U.S. federal tax-free spin-off to IBM shareholders and completed by the end of 2021. It will be subject to customary market, regulatory and other closing conditions, including final IBM Board of Directors’ approval. The announcement did not have any classification impact to the company’s Consolidated Financial Statements or segment reporting. IBM will report the managed infrastructure services unit as discontinued operations after separation. For the three months ended March 31, 2021, the company reported a benefit from income taxes of $51 million. The tax benefit was primarily driven by the resolution of certain tax audit matters in the first quarter of 2021. For the three months ended March 31, 2020, the company reported a benefit from income taxes of $1,226 million. The tax benefit was primarily related to the tax impacts of an intra-entity sale of certain of the company’s intellectual property. Noncontrolling interest amounts of $7.6 million and $4.5 million, net of tax, for the three months ended March 31, 2021 and 2020, respectively, are included as a reduction within other (income) and expense in the Consolidated Income Statement. Interim results are not necessarily indicative of financial results for a full year. The information included in this Form 10-Q should be read in conjunction with the company’s 2020 Annual Report. Within the financial statements and tables presented, certain columns and rows may not add due to the use of rounded numbers for disclosure purposes. Percentages presented are calculated from the underlying whole-dollar amounts. Certain prior period amounts have been reclassified to conform to the current period presentation. This is annotated where applicable.

Accounting Changes

Accounting Changes	3 Months Ended
	Mar. 31, 2021
Accounting Changes
Accounting Changes	2. Accounting Changes: Standards Implemented ​ Simplifying the Accounting for Income Taxes Standard/Description Effective Date and Adoption Considerations Effect on Financial Statements or Other Significant Matters Reference Rate Reform Standard/Description Effective Date and Adoption Considerations Effect on Financial Statements or Other Significant Matters Simplifying the Test for Goodwill Impairment Standard/Description Effective Date and Adoption Considerations Effect on Financial Statements or Other Significant Matters Financial Instruments–Credit Losses Standard/Description Effective Date and Adoption Considerations Effect on Financial Statements or Other Significant Matters ​

Revenue Recognition

Revenue Recognition	3 Months Ended
	Mar. 31, 2021
Revenue Recognition
Revenue Recognition	3. Revenue Recognition: Disaggregation of Revenue The following tables provide details of revenue by major products/service offerings and by geography. Revenue by Major Products/Service Offerings ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) ​ ​ For the three months ended March 31: ​ 2021 ​ 2020 Cloud & Data Platforms ​ $ 2,866 ​ $ 2,536 Cognitive Applications ​ ​ 1,233 ​ ​ 1,182 Transaction Processing Platforms ​ 1,338 ​ 1,520 Total Cloud & Cognitive Software ​ $ 5,437 ​ $ 5,238 Consulting ​ 2,189 ​ 2,071 Application Management ​ 1,770 ​ 1,840 Global Process Services ​ 274 ​ 225 Total Global Business Services ​ $ 4,234 ​ $ 4,136 Infrastructure & Cloud Services ​ 4,853 ​ 4,916 Technology Support Services ​ 1,517 ​ 1,550 Total Global Technology Services ​ $ 6,370 ​ $ 6,467 Systems Hardware ​ 1,114 ​ 997 Operating Systems Software ​ 313 ​ 371 Total Systems ​ $ 1,427 ​ $ 1,368 Global Financing* ​ 240 ​ 299 Other ​ 23 ​ 62 Total revenue ​ $ 17,730 ​ $ 17,571 * Contains lease and loan/working capital financing arrangements which are not subject to the guidance on revenue from contracts with customers. ​ Revenue by Geography ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) ​ For the three months ended March 31: ​ 2021 ​ 2020 Americas ​ $ 8,179 ​ $ 8,166 Europe/Middle East/Africa ​ 5,641 ​ 5,517 Asia Pacific ​ 3,909 ​ 3,888 Total ​ $ 17,730 ​ $ 17,571 ​ Remaining Performance Obligations The remaining performance obligation (RPO) disclosure provides the aggregate amount of the transaction price yet to be recognized as of the end of the reporting period and an explanation as to when the company expects to recognize these amounts in revenue. It is intended to be a statement of overall work under contract that has not yet been performed and does not include contracts in which the customer is not committed, such as certain as-a-Service, governmental, term software license and services offerings. The customer is not considered committed when they are able to terminate for convenience without payment of a substantive penalty. The disclosure includes estimates of variable consideration, except when the variable consideration is a sales-based or usage-based royalty promised in exchange for a license of intellectual property. Additionally, as a practical expedient, the company does not include contracts that have an original duration of one year or less. RPO estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts, periodic revalidations, adjustment for revenue that has not materialized and adjustments for currency. At March 31, 2021, the aggregate amount of the transaction price allocated to RPO related to customer contracts that are unsatisfied or partially unsatisfied was $114 billion. Approximately 60 percent of the amount is expected to be recognized as revenue in the subsequent two years, approximately 30 percent in the subsequent three Revenue Recognized for Performance Obligations Satisfied (or Partially Satisfied) in Prior Periods For the three months ended March 31, 2021, revenue was reduced by $45 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. Reconciliation of Contract Balances The following table provides information about notes and accounts receivable–trade, contract assets and deferred income balances: ​ ​ ​ ​ ​ ​ ​ ​ ​ At March 31, At December 31, (Dollars in millions) ​ 2021 ​ 2020 Notes and accounts receivable–trade (net of allowances of $345 in 2021 and $351 in 2020) ​ $ 6,458 ​ $ 7,132 Contract assets* ​ 522 ​ 497 Deferred income (current) ​ 14,197 ​ 12,833 Deferred income (noncurrent) ​ 4,153 ​ 4,301 * Included within prepaid expenses and other current assets in the Consolidated Balance Sheet. The amount of revenue recognized during the three months ended March 31, 2021 that was included within the deferred income balance at December 31, 2020 was $4.2 billion and was 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 three months ended March 31, 2021 and the year ended December 31, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) ​ ​ ​ ​ January 1, 2021 ​ Additions / (Releases) ​ Write-offs ​ Other* ​ March 31, 2021 $ 351 ​ $ 1 ​ $ (6) ​ $ (2) ​ $ 345 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ January 1, 2020 ​ Additions / (Releases) ​ Write-offs ​ Other* ​ December 31, 2020 $ 316 ​ $ 76 ​ $ (46) ​ $ 5 ​ $ 351 * Primarily represents translation adjustments . ​ The contract assets allowance for expected credit losses was not material in any of the periods presented.

Segments

Segments	3 Months Ended
	Mar. 31, 2021
Segments
Segments	4. 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, in part, by the chief operating decision maker, both in evaluating the performance of, and in allocating resources to, each of the segments. SEGMENT INFORMATION ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cloud & Global Global ​ ​ ​ ​ ​ Cognitive ​ Business ​ Technology ​ ​ ​ ​ Global ​ Total (Dollars in millions) ​ Software ​ Services ​ Services ​ Systems ​ Financing ​ Segments For the three months ended March 31, 2021: ​ ​ ​ ​ ​ ​ ​ External revenue ​ $ 5,437 ​ $ 4,234 ​ $ 6,370 ​ $ 1,427 ​ $ 240 ​ $ 17,707 ​ Internal revenue ​ 832 ​ 55 ​ 313 ​ 189 ​ 168 ​ 1,557 ​ Total revenue ​ $ 6,269 ​ $ 4,289 ​ $ 6,683 ​ $ 1,616 ​ $ 408 ​ $ 19,264 ​ Pre-tax income/(loss) from continuing operations ​ $ 1,428 ​ $ 390 ​ $ 140 ​ $ (2) ​ $ 166 ​ $ 2,122 ​ Revenue year-to-year change ​ 3.6 % 2.5 % (1.2) % 6.6 % (20.2) % 1.3 % Pre-tax income/(loss) year-to-year change ​ 53.0 % 44.1 % nm nm ​ (14.2) % 111.6 % Pre-tax income/(loss) margin ​ 22.8 % 9.1 % 2.1 % (0.1) % 40.8 % 11.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the three months ended March 31, 2020: ​ ​ ​ ​ ​ ​ ​ External revenue ​ $ 5,238 ​ $ 4,136 ​ $ 6,467 ​ $ 1,368 ​ $ 299 ​ $ 17,508 ​ Internal revenue ​ 813 ​ 46 ​ 294 ​ 148 ​ 212 ​ 1,514 ​ Total revenue ​ $ 6,052 ​ $ 4,183 ​ $ 6,761 ​ $ 1,516 ​ $ 511 ​ $ 19,023 ​ Pre-tax income/(loss) from continuing operations ​ $ 933 ​ $ 271 ​ $ (178) ​ $ (217) ​ $ 194 ​ $ 1,003 ​ Pre-tax income/(loss) margin ​ 15.4 % 6.5 % (2.6) % (14.3) % 37.9 % 5.3 % nm - not meaningful ​ Reconciliations to IBM as Reported: ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) ​ ​ For the three months ended March 31: ​ 2021 ​ 2020 Revenue: ​ ​ ​ Total reportable segments ​ $ 19,264 ​ $ 19,023 ​ Other–divested businesses ​ 1 ​ 18 ​ Other revenue ​ 21 ​ 44 ​ Eliminations of internal transactions ​ (1,557) ​ (1,514) ​ Total consolidated revenue ​ $ 17,730 ​ $ 17,571 ​ ​ ​ ​ ​ ​ ​ ​ ​ Pre-tax income from continuing operations: ​ ​ ​ Total reportable segments ​ $ 2,122 ​ $ 1,003 ​ Amortization of acquired intangible assets ​ (452) ​ (473) ​ Acquisition-related (charges)/income ​ (16) ​ 0 ​ Non-operating retirement-related (costs)/income ​ (343) ​ (264) ​ Spin-off related charges ​ ​ (61) ​ ​ — ​ Elimination of internal transactions ​ (73) ​ (55) ​ Other – ​ (8) ​ 25 ​ Unallocated corporate amounts ​ (263) ​ (284) ​ Total pre-tax income/(loss) from continuing operations ​ $ 905 ​ $ (49) ​ ​

Acquisitions & Divestitures

Acquisitions & Divestitures	3 Months Ended
	Mar. 31, 2021
Acquisitions & Divestitures
Acquisitions & Divestitures	5. 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. During the three months ended March 31, 2021, the company completed three acquisitions at an aggregate cost of $987 million. The Global Business Services segment completed the acquisition of Nordcloud, a consulting company providing services in cloud implementation, application transformation and managed services; and Taos Mountain, LLC (Taos), a leading cloud professional and managed services provider. The Cloud & Cognitive Software segment, through Red Hat, completed the acquisition of StackRox, an innovator in container and Kubernetes-native security. 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. The purchase consideration for the acquisition of Nordcloud includes a fair value estimate of contingent consideration to be paid annually through the first quarter of 2024 upon achieving certain revenue milestones. The annual payments are not expected to be material. The following table reflects the purchase price related to these acquisitions and the resulting purchase price allocation as of March 31, 2021. ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization ​ Total (Dollars in millions) Life (in years) ​ Acquisitions Current assets ​ ​ ​ $ 72 Property, plant and equipment/noncurrent assets ​ ​ ​ ​ 4 Intangible assets: ​ ​ ​ ​ ​ Goodwill N/A ​ ​ 746 Client relationships 7 ​ ​ 134 Completed technology 3-7 ​ ​ 114 Trademarks 2-6 ​ ​ 27 Total assets acquired ​ ​ ​ $ 1,097 Current liabilities ​ ​ ​ ​ 48 Noncurrent liabilities ​ ​ ​ ​ 62 Total liabilities assumed ​ ​ ​ $ 110 Total purchase price ​ ​ ​ $ 987 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. The overall weighted-average useful life of the identified amortizable intangible assets acquired was 6.8 years. These 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. Goodwill of $501 million and $245 million was assigned to the Global Business Services segment and Cloud & Cognitive Software segment, respectively. It is expected that approximately 11 percent of the goodwill will be deductible for tax purposes. 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. ​ At December 31, 2020, the remaining cash to be remitted by the company related to certain fourth-quarter 2020 acquisitions was $323 million. This amount was classified as restricted cash in the Consolidated Balance Sheet at December 31, 2020. At March 31, 2021, the remaining amount to be remitted was not material. ​ Divestitures In the fourth quarter of 2020, the company entered into a definitive agreement to sell certain remaining OEM commercial financing capabilities reported within the Global Financing segment. The financial terms related to this transaction are not material. The transaction is expected to be completed in the second half of 2021.

Earnings Per Share of Common St

Earnings Per Share of Common Stock	3 Months Ended
	Mar. 31, 2021
Earnings Per Share of Common Stock
Earnings Per Share of Common Stock	6. Earnings Per Share of Common Stock The following table provides the computation of basic and diluted earnings per share of common stock for the three months ended March 31, 2021 and 2020. ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions except per share amounts) ​ ​ For the three months ended March 31: 2021 2020 Number of shares on which basic earnings per share is calculated: ​ ​ Weighted-average shares outstanding during period ​ 893,630,916 ​ 887,969,345 Add — Incremental shares under stock-based compensation plans ​ 6,622,441 ​ 5,740,415 Add — Incremental shares associated with contingently issuable shares ​ 1,492,709 ​ 1,329,477 Number of shares on which diluted earnings per share is calculated ​ 901,746,065 ​ 895,039,238 ​ ​ ​ ​ ​ ​ ​ Income from continuing operations ​ $ 956 ​ $ 1,176 Income/(loss) from discontinued operations, net of tax ​ (1) ​ (1) Net income on which basic earnings per share is calculated ​ $ 955 ​ $ 1,175 ​ ​ ​ ​ ​ ​ ​ Income from continuing operations ​ $ 956 ​ $ 1,176 Net income applicable to contingently issuable shares ​ — ​ (2) Income from continuing operations on which diluted earnings per share is calculated ​ $ 956 ​ $ 1,174 Income/(loss) from discontinued operations, net of tax, on which basic and diluted earnings per share is calculated ​ (1) ​ (1) Net income on which diluted earnings per share is calculated ​ $ 955 ​ $ 1,173 ​ ​ ​ ​ ​ ​ ​ Earnings/(loss) per share of common stock: ​ ​ Assuming dilution ​ ​ Continuing operations ​ $ 1.06 ​ $ 1.31 Discontinued operations ​ 0.00 ​ 0.00 Total ​ $ 1.06 ​ $ 1.31 Basic ​ ​ Continuing operations ​ $ 1.07 ​ $ 1.32 Discontinued operations ​ 0.00 ​ 0.00 Total ​ $ 1.07 ​ $ 1.32 ​ Stock options to purchase 1,510,886 shares and 1,136,899 shares were outstanding as of March 31, 2021 and 2020, respectively, but were not included in the computation of diluted earnings per share because the exercise price of the options during the respective period was greater than the average market price of the common shares, and, therefore, the effect would have been antidilutive.

Financial Assets & Liabilities

Financial Assets & Liabilities	3 Months Ended
	Mar. 31, 2021
Financial Assets & Liabilities
Financial Assets & Liabilities	7. Financial Assets & Liabilities : Fair Value Measurements ​ Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The company classifies certain assets and liabilities based on the following fair value hierarchy: ​ ● Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities that can be accessed at the measurement date; ​ ● Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and ​ ● Level 3—Unobservable inputs for the asset or liability. ​ When available, the company uses unadjusted quoted market prices in active markets to measure the fair value and classifies such items as Level 1. If quoted market prices are not available, fair value is based upon internally developed models that use current market-based or independently sourced market parameters such as interest rates and currency rates. Items valued using internally generated models are classified according to the lowest level input or value driver that is significant to the valuation. ​ The determination of fair value considers various factors including interest rate yield curves and time value underlying the financial instruments. For derivatives and debt securities, the company uses a discounted cash flow analysis using discount rates commensurate with the duration of the instrument. ​ In determining the fair value of financial instruments, the company considers certain market valuation adjustments to the “base valuations” calculated using the methodologies described below for several parameters that market participants would consider in determining fair value: ​ ● Counterparty credit risk adjustments are applied to financial instruments, taking into account the actual credit risk of a counterparty as observed in the credit default swap market to determine the true fair value of such an instrument. ​ ● Credit risk adjustments are applied to reflect the company’s own credit risk when valuing all liabilities measured at fair value. The methodology is consistent with that applied in developing counterparty credit risk adjustments, but incorporates the company’s own credit risk as observed in the credit default swap market. ​ The company holds investments primarily in time deposits, certificates of deposit, and U.S. government debt that are designated as available-for-sale. The primary objective of the company’s cash and debt investment portfolio is to maintain principal by investing in very liquid and highly rated investment grade securities. ​ The company’s standard practice is to hold all of its debt security investments classified as available-for-sale until maturity. No impairment for credit losses and no material non-credit impairment were recorded for the three months ended March 31, 2021 and 2020, respectively. ​ Certain non-financial assets such as property, plant and equipment, operating right-of-use assets, land, goodwill and intangible assets are also subject to nonrecurring fair value measurements if they are deemed to be impaired. The impairment models used for non-financial assets depend on the type of asset. There were no material impairments of non-financial assets for the three months ended March 31, 2021 and 2020, respectively. ​ The following table presents the company’s financial assets and financial liabilities that are measured at fair value on a recurring basis at March 31, 2021 and December 31, 2020. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value ​ ​ ​ ​ ​ ​ Hierarchy ​ At March 31, 2021 ​ At December 31, 2020 (Dollars in millions) Level Assets (7) Liabilities (8) Assets (7) Liabilities (8) Cash equivalents: (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Time deposits and certificates of deposit (2) ​ 2 ​ $ 5,943 ​ $ N/A ​ $ 7,668 ​ $ N/A Money market funds ​ 1 ​ ​ 141 ​ ​ N/A ​ ​ 148 ​ ​ N/A U.S. government securities (2) ​ 2 ​ ​ — ​ ​ N/A ​ ​ 500 ​ ​ N/A Total cash equivalents ​ ​ ​ $ 6,084 ​ $ N/A ​ $ 8,316 ​ $ N/A Equity investments (3) ​ 1 ​ ​ 1 ​ ​ N/A ​ ​ 2 ​ ​ N/A Debt securities-current (2)(4) ​ 2 ​ ​ 600 ​ ​ N/A ​ ​ 600 ​ ​ N/A Debt securities-noncurrent (2)(5) ​ 2 ​ ​ 6 ​ ​ N/A ​ ​ 7 ​ ​ N/A Derivatives designated as hedging instruments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest rate contracts ​ 2 ​ ​ 20 ​ ​ — ​ ​ 100 ​ ​ — Foreign exchange contracts ​ 2 ​ ​ 404 ​ ​ 276 ​ ​ 111 ​ ​ 580 Derivatives not designated as hedging instruments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign exchange contracts ​ 2 ​ ​ 13 ​ ​ 50 ​ ​ 13 ​ ​ 47 Equity contracts (6) ​ 1,2 ​ ​ 13 ​ ​ 6 ​ ​ 12 ​ ​ — Total ​ ​ ​ $ 7,141 ​ $ 332 ​ $ 9,161 ​ $ 627 (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) Included within investments and sundry assets in the Consolidated Balance Sheet. (4) Primarily includes U.S. treasury bills that are reported within marketable securities in the Consolidated Balance Sheet. (5) Primarily includes government debt securities that are reported within investments and sundry assets in the Consolidated Balance Sheet. (6) Level 1 includes immaterial amounts related to equity futures contracts. (7) The gross balances of derivative assets contained within prepaid expenses and other current assets, and investments and sundry assets in the Consolidated Balance Sheet at March 31, 2021 were $386 million and $64 million, respectively, and at December 31, 2020 were $85 million and $151 million, respectively. (8) The gross balances of derivative liabilities contained within other accrued expenses and liabilities, and other liabilities in the Consolidated Balance Sheet at March 31, 2021 were $277 million and $55 million, respectively, and at December 31, 2020 were $587 million and $40 million , respectively. ​ N/A - not applicable ​ Financial Assets and Liabilities Not Measured at Fair Value ​ Short-Term Receivables and Payables ​ Notes and other accounts receivable 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 and including short-term finance lease liabilities) are financial liabilities with carrying values that approximate fair value. If measured at fair value in the financial statements, these financial instruments would be classified as Level 3 in the fair value hierarchy, except for short-term debt which would be classified as Level 2. ​ Loans and Long-Term Receivables ​ Fair values are based on discounted future cash flows using current interest rates offered for similar loans to clients with similar credit ratings for the same remaining maturities. At March 31, 2021 and December 31, 2020, 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 $51,206 million and $54,355 million, and the estimated fair value was $55,962 million and $61,598 million at March 31, 2021 and December 31, 2020, respectively. If measured at fair value in the financial statements, long-term debt (including the current portion) would be classified as Level 2 in the fair value hierarchy.

Financing Receivables

Financing Receivables	3 Months Ended
	Mar. 31, 2021
Financing Receivables
Financing Receivables	8. 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. Loans are provided primarily to clients to finance the purchase of hardware, software and services. Payment terms on these financing arrangements are generally for terms up to seven years. Investment in sales-type and direct financing leases relate principally to the company’s Systems products and are for terms ranging generally from two A summary of the components of the company’s financing receivables is presented as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Client Financing Receivables ​ ​ ​ ​ ​ ​ ​ Client Loan and Investment in ​ ​ ​ ​ Installment Payment ​ Sales-Type and ​ Commercial ​ ​ ​ (Dollars in millions) ​ Receivables ​ Direct Financing ​ Financing ​ ​ ​ At March 31, 2021: ​ (Loans) ​ Leases ​ Receivables ​ Total Financing receivables, gross ​ $ 10,218 ​ $ 3,923 ​ $ 1,119 ​ $ 15,261 Unearned income ​ ​ (421) ​ (290) ​ ​ 0 ​ ​ (711) Residual value* ​ ​ — ​ 430 ​ ​ — ​ ​ 430 Amortized cost ​ $ 9,797 ​ $ 4,064 ​ $ 1,119 ​ $ 14,980 Allowance for credit losses ​ ​ (154) ​ (74) ​ ​ (7) ​ ​ (236) Total financing receivables, net ​ $ 9,643 ​ $ 3,989 ​ $ 1,112 ​ $ 14,744 Current portion ​ $ 6,050 ​ $ 1,660 ​ $ 1,112 ​ $ 8,822 Noncurrent portion ​ $ 3,592 ​ $ 2,329 ​ $ — ​ $ 5,922 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Client Financing Receivables ​ ​ ​ ​ ​ ​ ​ Client Loan and Investment in ​ ​ ​ ​ Installment Payment ​ Sales-Type and ​ Commercial ​ ​ ​ (Dollars in millions) ​ Receivables ​ Direct Financing ​ Financing ​ ​ ​ At December 31, 2020: ​ (Loans) ​ Leases ​ Receivables ​ Total Financing receivables, gross ​ $ 12,159 ​ $ 4,001 ​ $ 2,419 ​ $ 18,580 Unearned income ​ ​ (488) ​ ​ (335) ​ ​ 0 ​ ​ (823) Residual value* ​ ​ — ​ 485 ​ ​ — ​ ​ 485 Amortized cost ​ $ 11,671 ​ $ 4,151 ​ $ 2,419 ​ $ 18,242 Allowance for credit losses ​ ​ (173) ​ (82) ​ ​ (8) ​ ​ (263) Total financing receivables, net ​ $ 11,498 ​ $ 4,069 ​ $ 2,411 ​ $ 17,979 Current portion ​ $ 6,955 ​ $ 1,525 ​ $ 2,411 ​ $ 10,892 Noncurrent portion ​ $ 4,542 ​ $ 2,544 ​ $ — ​ $ 7,086 * Includes guaranteed and unguaranteed residual value. ​ The company has a long-standing practice of taking mitigation actions, in certain circumstances, to transfer credit risk to third parties, with enhanced focus due to the current macroeconomic uncertainty. These actions may include credit insurance, financial guarantees, nonrecourse 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 nonrecourse borrowings were $425 million and $482 million at March 31, 2021 and December 31, 2020, respectively. These borrowings are included in note 11, “Borrowings.” Transfer of Financial Assets For the three months ended March 31, 2021, the company sold $995 million of client financing receivables to third parties, consisting of loan and lease receivables of $653 million and $342 million, respectively. More than half of the receivables sold were classified as current assets at the time of sale. On December 24, 2020, the company entered into an agreement with a third-party investor to sell up to $3,000 million of IBM short-term commercial financing receivables, at any one time, on a revolving basis. The company sold $1,167 million of commercial financing receivables under the agreement for the three months ended March 31, 2021. In addition, the company included $257 million and $383 million of commercial financing receivables classified as held for sale at March 31, 2021 and December 31, 2020, respectively, in short-term financing receivables in the Consolidated Balance Sheet. The carrying value of the receivables classified as held for sale approximates fair value. The transfers of these receivables qualified as true sales and therefore reduced financing receivables, resulting in a benefit to cash flows from operating activities. The impacts to the Consolidated Income Statement, including fees and net gain or loss associated with the transfers of these receivables for the three months ended March 31, 2021 were not material. The company did not Financing Receivables by Portfolio Segment The following tables present the amortized cost basis for client financing receivables at March 31, 2021 and December 31, 2020, further segmented by three classes: Americas, Europe/Middle East/Africa (EMEA) and Asia Pacific. The commercial financing receivables portfolio segment is excluded from the tables in the sections below as the receivables are short term in nature and the current estimated risk of loss and resulting impact to the company’s financial results are not material. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) ​ ​ ​ ​ At March 31, 2021: ​ Americas ​ EMEA ​ Asia Pacific ​ Total Amortized cost $ 6,867 ​ $ 4,244 ​ $ 2,750 ​ $ 13,861 Allowance for credit losses ​ ​ ​ ​ Beginning balance at January 1, 2021 ​ $ 141 ​ $ 77 ​ $ 37 ​ $ 255 Write-offs ​ ​ (2) ​ ​ (1) ​ ​ (6) ​ ​ (9) Recoveries ​ 0 ​ 0 ​ ​ 0 ​ ​ 1 Additions/(releases) ​ (11) ​ 2 ​ ​ (3) ​ ​ (12) Other* ​ (3) ​ (3) ​ ​ 0 ​ ​ (6) Ending balance at March 31, 2021 ​ $ 125 ​ $ 76 ​ $ 27 ​ $ 229 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) ​ ​ ​ ​ At December 31, 2020: ​ Americas ​ EMEA ​ Asia Pacific ​ Total Amortized cost $ 7,758 ​ $ 5,023 ​ $ 3,042 ​ $ 15,822 Allowance for credit losses ​ ​ ​ ​ Beginning balance at January 1, 2020 ​ $ 142 ​ $ 69 ​ $ 41 ​ $ 252 Write-offs ​ $ (28) ​ $ (3) ​ $ (3) ​ $ (34) Recoveries ​ 0 ​ 0 ​ ​ 2 ​ ​ 3 Additions/(releases) ​ 33 ​ 5 ​ ​ (4) ​ ​ 34 Other* ​ (6) ​ 6 ​ ​ 1 ​ ​ 1 Ending balance at December 31, 2020 ​ $ 141 ​ $ 77 ​ $ 37 ​ $ 255 * Primarily represents translation adjustments. IBM continues to monitor the global impacts from the COVID-19 pandemic as well as its impact on external economic models. The company’s allowance for credit losses at March 31, 2021 and December 31, 2020 reflects the qualitative process which is described further in note A, “Significant Accounting Policies” in the company’s 2020 Annual Report. Any changes to economic models that occurred after the balance sheet date will be reflected in future periods. ​ 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. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortized Billed Amortized ​ ​ Total ​ Amortized ​ Cost ​ Invoices ​ Cost (Dollars in millions) ​ Amortized ​ Cost ​ > 90 Days and ​ > 90 Days and ​ Not At March 31, 2021: ​ Cost ​ > 90 Days (1) ​ Accruing (1) ​ Accruing ​ Accruing (2) Americas ​ $ 6,867 ​ $ 271 ​ $ 182 ​ $ 11 ​ $ 94 EMEA ​ 4,244 ​ ​ 102 ​ ​ 14 ​ ​ 3 ​ ​ 93 Asia Pacific ​ 2,750 ​ ​ 32 ​ ​ 9 ​ ​ 4 ​ ​ 24 Total client financing receivables ​ $ 13,861 ​ $ 405 ​ $ 205 ​ $ 18 ​ $ 212 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortized Billed Amortized ​ ​ Total ​ Amortized ​ Cost ​ Invoices ​ Cost (Dollars in millions) ​ Amortized ​ Cost ​ > 90 Days and ​ > 90 Days and ​ Not At December 31, 2020: ​ Cost ​ > 90 Days (1) ​ Accruing (1) ​ Accruing ​ Accruing (2) Americas ​ $ 7,758 ​ $ 295 ​ $ 200 ​ $ 12 ​ $ 96 EMEA ​ 5,023 ​ ​ 119 ​ ​ 28 ​ ​ 5 ​ ​ 95 Asia Pacific ​ 3,042 ​ ​ 42 ​ ​ 12 ​ ​ 4 ​ ​ 32 Total client financing receivables ​ $ 15,822 ​ $ 456 ​ $ 241 ​ $ 20 ​ $ 223 (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 $167 million and $178 million at March 31, 2021 and December 31, 2020, respectively. Financing income recognized on these receivables was immaterial for the three months ended March 31, 2021 and 2020, respectively. ​ Credit Quality Indicators The company’s credit quality indicators, which are based on rating agency data, publicly available information and information provided by customers, are reviewed periodically based on the relative level of risk. The resulting indicators are a numerical rating system that maps to Moody’s Investors Service credit ratings as shown below. The company uses information provided by Moody’s, where available, as one of many inputs in its determination of customer credit ratings. The credit quality of the customer is evaluated based on these indicators and is assigned the same risk rating whether the receivable is a lease or a loan. The following tables present the amortized cost basis for client financing receivables by credit quality indicator at March 31, 2021 and December 31, 2020, 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 reduces the risk to IBM. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) ​ Americas EMEA Asia Pacific At March 31, 2021: Aaa – Baa3 Ba1 – D Aaa – Baa3 Ba1 – D Aaa – Baa3 Ba1 – D Vintage year: ​ ​ ​ ​ ​ ​ 2021 ​ $ 808 ​ $ 421 ​ $ 310 ​ $ 349 ​ $ 253 ​ $ 105 2020 ​ ​ 1,966 ​ ​ 923 ​ ​ 1,086 ​ ​ 887 ​ ​ 721 ​ ​ 230 2019 ​ 871 ​ ​ 457 ​ ​ 471 ​ ​ 431 ​ ​ 499 ​ ​ 94 2018 ​ 666 ​ ​ 283 ​ ​ 311 ​ ​ 166 ​ ​ 365 ​ ​ 133 2017 ​ 206 ​ ​ 117 ​ ​ 43 ​ ​ 103 ​ ​ 165 ​ ​ 40 2016 and prior ​ 56 ​ ​ 92 ​ ​ 34 ​ ​ 53 ​ ​ 109 ​ ​ 36 Total ​ $ 4,573 ​ $ 2,294 ​ $ 2,254 ​ $ 1,989 ​ $ 2,111 ​ $ 639 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) ​ Americas ​ EMEA ​ Asia Pacific At December 31, 2020: Aaa – Baa3 Ba1 – D Aaa – Baa3 Ba1 – D Aaa – Baa3 Ba1 – D Vintage year: ​ ​ ​ ​ ​ ​ 2020 ​ $ 2,818 ​ $ 1,449 ​ $ 1,513 ​ $ 1,427 ​ $ 958 ​ $ 351 2019 ​ 988 ​ ​ 623 ​ ​ 668 ​ ​ 519 ​ ​ 564 ​ ​ 123 2018 ​ 829 ​ ​ 360 ​ ​ 329 ​ ​ 245 ​ ​ 419 ​ ​ 167 2017 ​ 285 ​ ​ 154 ​ ​ 70 ​ ​ 128 ​ ​ 205 ​ ​ 52 2016 ​ 90 ​ ​ 52 ​ ​ 33 ​ ​ 46 ​ ​ 114 ​ ​ 33 2015 and prior ​ 28 ​ ​ 81 ​ ​ 22 ​ ​ 22 ​ ​ 38 ​ ​ 18 Total ​ $ 5,038 ​ $ 2,720 ​ $ 2,635 ​ $ 2,387 ​ $ 2,298 ​ $ 743 ​ Troubled Debt Restructurings ​ The company did not have any significant troubled debt restructurings during the three months ended March 31, 2021 or for the year ended December 31, 2020.

Leases

Leases	3 Months Ended
	Mar. 31, 2021
Leases
Leases	9. Leases: Accounting for Leases as a Lessor The following table presents amounts included in the Consolidated Income Statement related to lessor activity: ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) ​ For the three months ended March 31: ​ 2021 2020 Lease income – sales-type and direct financing leases: ​ ​ ​ Sales-type lease selling price ​ $ 363 ​ $ 211 Less: Carrying value of underlying assets* ​ 59 ​ 76 Gross profit ​ $ 304 ​ $ 135 Interest income on lease receivables ​ 51 ​ 74 Total sales-type and direct financing lease income ​ $ 355 ​ $ 208 Lease income – operating leases ​ 51 ​ 71 Variable lease income ​ 57 ​ 30 Total lease income ​ $ 463 ​ $ 310 * Excludes unguaranteed residual value. ​

Intangible Assets Including Goo

Intangible Assets Including Goodwill	3 Months Ended
	Mar. 31, 2021
Intangible Assets Including Goodwill
Intangible Assets Including Goodwill	10. Intangible Assets Including Goodwill: Intangible Assets The following table presents the company's intangible asset balances by major asset class. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At March 31, 2021 ​ Gross Carrying Accumulated Net Carrying (Dollars in millions) ​ Amount ​ Amortization ​ Amount* Intangible asset class: ​ ​ ​ ​ ​ ​ ​ ​ ​ Capitalized software ​ $ 1,854 ​ $ (837) ​ $ 1,017 Client relationships ​ 8,874 ​ (2,275) ​ 6,599 Completed technology ​ 5,972 ​ (1,784) ​ 4,188 Patents/trademarks ​ 2,196 ​ (480) ​ 1,717 Other** ​ 56 ​ (41) ​ 14 Total ​ $ 18,952 ​ $ (5,417) ​ $ 13,535 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, 2020 ​ Gross Carrying Accumulated Net Carrying (Dollars in millions) ​ Amount ​ Amortization ​ Amount* Intangible asset class: ​ ​ ​ ​ ​ ​ ​ ​ ​ Capitalized software ​ $ 1,777 ​ $ (814) ​ $ 963 Client relationships ​ 8,838 ​ (2,056) ​ 6,783 Completed technology ​ 5,957 ​ (1,671) ​ 4,286 Patents/trademarks ​ 2,246 ​ (499) ​ 1,747 Other** ​ 56 ​ (39) ​ 16 Total ​ $ 18,874 ​ $ (5,079) ​ $ 13,796 * Amounts as of March 31, 2021 and December 31, 2020 include a decrease in net intangible asset balances of $137 million and an increase of $279 million, respectively, due to foreign currency translation. ** Other intangibles are primarily acquired proprietary and non-proprietary business processes, methodologies and systems . ​ The net carrying amount of intangible assets decreased $261 million during the first three months of 2021, primarily due to intangible asset amortization, partially offset by additions of acquired intangibles and capitalized software. The aggregate intangible amortization expense was $620 million and $622 million for the quarters ended March 31, 2021 and 2020, respectively. In the first three months of 2021, the company retired $256 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 March 31, 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capitalized Acquired ​ (Dollars in millions) ​ Software ​ Intangibles ​ Total Remainder of 2021 ​ $ 469 ​ $ 1,379 ​ $ 1,848 2022 ​ 368 ​ 1,774 ​ 2,142 2023 ​ 168 ​ 1,459 ​ 1,627 2024 ​ 12 ​ 1,408 ​ 1,420 2025 ​ — ​ 1,389 ​ 1,389 Thereafter ​ ​ — ​ ​ 5,109 ​ 5,109 ​ Goodwill The changes in the goodwill balances by segment for the three months ended March 31, 2021 and for the year ended December 31, 2020 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Currency ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Purchase ​ Translation ​ ​ ​ (Dollars in millions) ​ Balance ​ Goodwill ​ Price ​ and Other ​ Balance Segment ​ 1/1/2021 ​ Additions ​ Adjustments ​ Adjustments* ​ 3/31/2021 Cloud & Cognitive Software ​ $ 43,934 ​ $ 245 ​ $ 6 ​ $ (249) ​ $ 43,935 Global Business Services ​ 6,145 ​ 501 ​ 0 ​ (61) ​ 6,585 Global Technology Services ​ 7,245 ​ — ​ — ​ (70) ​ 7,175 Systems ​ 2,293 ​ — ​ 0 ​ (4) ​ 2,289 Total ​ $ 59,617 ​ $ 746 ​ $ 6 ​ $ (384) ​ $ 59,984 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Currency ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Purchase ​ Translation ​ ​ ​ (Dollars in millions) ​ Balance ​ Goodwill ​ Price ​ and Other ​ Balance Segment ​ 1/1/2020 ​ Additions ​ Adjustments ​ Adjustments* ​ 12/31/2020 Cloud & Cognitive Software ​ $ 43,037 ​ $ 362 ​ $ (139) ​ $ 675 ​ $ 43,934 Global Business Services ​ 5,775 ​ 205 ​ — ​ 165 ​ 6,145 Global Technology Services ​ 7,141 ​ — ​ — ​ 104 ​ 7,245 Systems ​ 2,270 ​ 8 ​ — ​ 15 ​ 2,293 Total ​ $ 58,222 ​ $ 575 ​ $ (139) ​ $ 960 ​ $ 59,617 * Primarily driven by foreign currency translation. ​ There were no goodwill impairment losses recorded during the first three months of 2021 or full-year 2020 and the company has no accumulated impairment losses. Purchase price adjustments recorded in the first three months of 2021 and full-year 2020 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 during the first three months of 2021 were not material. In full-year 2020, net purchase price adjustments recorded to noncurrent tax assets and liabilities were related to the Red Hat acquisition.

Borrowings

Borrowings	3 Months Ended
	Mar. 31, 2021
Borrowings
Borrowings	11. Borrowings: Short-Term Debt ​ ​ ​ ​ ​ ​ ​ ​ ​ At March 31, At December 31, (Dollars in millions) ​ 2021 ​ 2020 Short-term loans ​ $ 36 ​ $ 130 Long-term debt – ​ 5,162 ​ 7,053 Total ​ $ 5,198 ​ $ 7,183 ​ The weighted-average interest rate for short-term loans was 5.3 percent and 5.7 percent at March 31, 2021 and December 31, 2020, respectively. Long-Term Debt Pre-Swap Borrowing ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance Balance (Dollars in millions) ​ Maturities ​ 3/31/2021 ​ 12/31/2020 U.S. dollar debt (weighted-average interest rate at March 31, 2021):* ​ ​ 0.7% 2021 ​ $ 2,635 ​ $ 5,499 2.6% 2022 ​ 5,712 ​ 6,233 3.5% 2023 ​ 1,636 ​ 2,395 3.3% 2024 ​ 5,025 ​ 5,029 6.8% 2025 ​ 626 ​ 631 3.3% 2026 ​ 4,368 ​ 4,370 3.0% 2027 ​ 2,219 ​ 2,219 6.5% 2028 ​ ​ 313 ​ 313 3.5% ​ 2029 ​ ​ 3,250 ​ ​ 3,250 2.0% ​ 2030 ​ ​ 1,350 ​ ​ 1,350 5.9% 2032 ​ 600 ​ 600 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 7.1% 2096 ​ 316 ​ 316 ​ ​ ​ ​ $ 37,062 ​ $ 41,218 Other currencies (weighted-average interest rate at March 31, 2021, in parentheses):* ​ ​ Euro (1.1%) 2021–2040 ​ $ 17,618 ​ $ 18,355 Pound sterling (2.6%) 2022 ​ 414 ​ 411 Japanese yen (0.3%) 2022–2026 ​ 1,316 ​ 1,409 Other (4.4%) 2021–2025 ​ 299 ​ 324 ​ ​ ​ ​ $ 56,708 ​ $ 61,718 Finance lease obligations (1.5%) ​ 2021–2030 ​ ​ 317 ​ ​ 296 ​ ​ ​ ​ $ 57,025 ​ $ 62,013 Less: net unamortized discount ​ 868 ​ 875 Less: net unamortized debt issuance costs ​ 147 ​ 156 Add: fair value adjustment** ​ 357 ​ 426 ​ ​ ​ ​ $ 56,367 ​ $ 61,408 Less: current maturities ​ 5,162 ​ 7,053 Total ​ $ 51,206 ​ $ 54,355 * Includes notes, debentures, bank loans and secured borrowings. ** The portion of the company’s fixed-rate debt obligations that is hedged is reflected in the Consolidated Balance Sheet as an amount equal to the sum of the debt’s carrying value and a fair value adjustment representing changes in the fair value of the hedged debt obligations attributable to movements in benchmark interest rates. The company’s indenture governing its debt securities and its various credit facilities each contain significant covenants which obligate the company to promptly pay principal and interest, limit the aggregate amount of secured indebtedness and sale and leaseback transactions to 10 percent of the company’s consolidated net tangible assets, and restrict the company’s ability to merge or consolidate unless certain conditions are met. The credit facilities also include a covenant on the company’s consolidated net interest expense ratio, which cannot be less than 2.20 to 1.0, as well as a cross default provision with respect to other defaulted indebtedness of at least $500 million. The company is in compliance with its debt covenants and provides periodic certifications to its lenders. The failure to comply with its debt covenants could constitute an event of default with respect to the debt to which such provisions apply. If certain events of default were to occur, the principal and interest on the debt to which such event of default applied would become immediately due and payable. In the first quarter of 2020, the company issued an aggregate of $4.1 billion of Euro fixed-rate notes and the proceeds were primarily used to early redeem outstanding fixed-rate debt which was due in 2021 in the aggregate amount of $2.9 billion. The notes were redeemed at a price equal to 100 percent of the aggregate principal plus a make-whole premium and accrued interest. The company incurred a loss of $49 million upon redemption that was recorded in other (income) and expense in the Consolidated Income Statement. In the first quarter of 2021, IBM Credit LLC early redeemed all of its outstanding fixed-rate debt in the aggregate amount of $1.75 billion with maturity dates ranging from 2021 to 2023 and deregistered with the U.S. Securities and Exchange Commission. The notes were redeemed at a price equal to 100 percent of the aggregate principal plus a make-whole premium and accrued interest. The company incurred a loss of approximately $22 million upon redemption that was recorded in other (income) and expense in the Consolidated Income Statement. Pre-swap annual contractual obligations of long-term debt outstanding at March 31, 2021, are as follows: ​ ​ ​ ​ ​ (Dollars in millions) Total Remainder of 2021 ​ $ 4,060 2022 ​ 6,826 2023 ​ 4,928 2024 ​ 6,442 2025 ​ 4,144 Thereafter ​ 30,625 Total ​ $ 57,025 ​ Interest on Debt ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) ​ ​ For the three months ended March 31: ​ 2021 ​ 2020 Cost of financing ​ $ 106 ​ $ 119 Interest expense ​ 280 ​ 326 Interest capitalized ​ 2 ​ 5 Total interest paid and accrued ​ $ 388 ​ $ 449 ​ Lines of Credit IBM has a $10.25 billion Five-Year Credit Agreement, a $2.5 billion Three-Year Credit Agreement and a $2.5 billion 364-day Credit Agreement with respective maturity dates of July 20, 2024, July 20, 2023 and July 1, 2021. ​ At March 31, 2021, there were no borrowings by the company, or its subsidiaries, under these credit facilities.

Commitments

Commitments	3 Months Ended
	Mar. 31, 2021
Commitments
Commitments	12. Commitments: The company’s extended lines of credit to third-party entities include unused amounts of $1.6 billion and $2.1 billion at March 31, 2021 and December 31, 2020, 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 $4.7 billion and $5.2 billion at March 31, 2021 and December 31, 2020, respectively. The company collectively evaluates the allowance for these arrangements using a provision methodology consistent with the portfolio of the commitments. Refer to note A, “Significant Accounting Policies” in the company’s 2020 Annual Report for additional information. The allowance for these commitments is recorded in other liabilities in the Consolidated Balance Sheet and was not material at March 31, 2021. The company has applied the guidance requiring a guarantor to disclose certain types of guarantees, even if the likelihood of requiring the guarantor’s performance is remote. The following is a description of arrangements in which the company is the guarantor. The company is a party to a variety of agreements pursuant to which it may be obligated to indemnify the other party with respect to certain matters. Typically, these obligations arise in the context of contracts entered into by the company, under which the company customarily agrees to hold the party harmless against losses arising from a breach of representations and covenants related to such matters as title to the assets sold, certain intellectual property rights, specified environmental matters, third-party performance of nonfinancial contractual obligations and certain income taxes. In each of these circumstances, payment by the company is conditioned on the other party making a claim pursuant to the procedures specified in the particular contract, the procedures of which typically allow the company to challenge the other party’s claims. While indemnification provisions typically do not include a contractual maximum on the company’s payment, the company’s obligations under these agreements may be limited in terms of time and/or nature of claim, and in some instances, the company may have recourse against third parties for certain payments made by the company. It is not possible to predict the maximum potential amount of future payments under these or similar agreements due to the conditional nature of the company’s obligations and the unique facts and circumstances involved in each particular agreement. Historically, payments made by the company under these agreements have not had a material effect on the company’s business, financial condition or results of operations. In addition, the company guarantees certain loans and financial commitments. The maximum potential future payment under these financial guarantees and the fair value of these guarantees recognized in the Consolidated Balance Sheet at March 31, 2021 and December 31, 2020 was not material. Changes in the company’s warranty liability for standard warranties, which are included in other accrued expenses and liabilities and other liabilities in the Consolidated Balance Sheet, and for extended warranty contracts, which are included in deferred income in the Consolidated Balance Sheet, are presented in the following tables. Standard Warranty Liability ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) 2021 2020 Balance at January 1 ​ $ 83 ​ $ 113 Current period accruals ​ 16 ​ 20 Accrual adjustments to reflect actual experience ​ (4) ​ (6) Charges incurred ​ (23) ​ (26) Balance at March 31 ​ $ 72 ​ $ 100 ​ Extended Warranty Liability (Deferred Income) ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) 2021 2020 Balance at January 1 ​ $ 425 ​ $ 477 Revenue deferred for new extended warranty contracts ​ 18 ​ 40 Amortization of deferred revenue ​ (53) ​ (57) Other* ​ (6) ​ (13) Balance at March 31 ​ $ 383 ​ $ 447 Current portion ​ $ 199 ​ $ 219 Noncurrent portion ​ $ 185 ​ $ 228 * Other primarily consists of foreign currency translation adjustments.

Contingencies

Contingencies	3 Months Ended
	Mar. 31, 2021
Contingencies
Contingencies	13. 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, privacy and data protection laws, regulations and threat actors, the company or its clients could become 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, securities, foreign operations, competition law and environmental matters. These actions may be commenced by a number of different parties, including competitors, clients, current or former employees, government and regulatory agencies, stockholders and representatives of the locations in which the company does business. Some of the actions to which the company is party may involve particularly complex technical issues, and some actions may raise novel questions under the laws of the various jurisdictions in which these matters arise. The company records a provision with respect to a claim, suit, investigation or proceeding when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Any recorded liabilities, including any changes to such liabilities for the quarter ended March 31, 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. The company is a defendant in an action filed on March 6, 2003 in state court in Salt Lake City, Utah by the SCO Group (SCO v. IBM). The company removed the case to Federal Court in Utah. Plaintiff is an alleged successor in interest to some of AT&T’s UNIX IP rights, and alleges copyright infringement, unfair competition, interference with contract and breach of contract with regard to the company’s distribution of AIX and Dynix and contribution of code to Linux and the company has asserted counterclaims. On September 14, 2007, plaintiff filed for bankruptcy protection, and all proceedings in this case were stayed. The court in another suit, the SCO Group, Inc. v. Novell, Inc., held a trial in March 2010. The jury found that Novell is the owner of UNIX and UnixWare copyrights; the judge subsequently ruled that SCO is obligated to recognize Novell’s waiver of SCO’s claims against IBM and Sequent for breach of UNIX license agreements. On August 30, 2011, the Tenth Circuit Court of Appeals affirmed the district court’s ruling and denied SCO’s appeal of this matter. In June 2013, the Federal Court in Utah granted SCO’s motion to reopen the SCO v. IBM case. In February 2016, the Federal Court ruled in favor of IBM on all of SCO’s remaining claims, and SCO appealed. On October 30, 2017, the Tenth Circuit Court of Appeals affirmed the dismissal of all but one of SCO’s remaining claims, which was remanded to the Federal Court in Utah. On March 9, 2017, the Commonwealth of Pennsylvania’s Department of Labor and Industry sued IBM in Pennsylvania state court regarding a 2006 contract for the development of a custom software system to manage the Commonwealth’s unemployment insurance benefits programs. The matter is pending in a Pennsylvania court. In December 2017, CIS General Insurance Limited (CISGIL) sued IBM UK regarding a contract entered into by IBM UK and CISGIL in 2015 to implement and operate an IT insurance platform. The contract was terminated by IBM UK in July 2017 for non-payment by CISGIL. CISGIL alleges wrongful termination, breach of contract and breach of warranty. In February 2021, the Technology & Construction Court in London rejected the majority of CISGIL’s claims and ruled in IBM’s favor on its counterclaim. The court’s decision requires IBM to pay approximately $20 million in damages, plus interest and litigation costs. CISGIL is expected to seek permission from the Court of Appeal to appeal the judgment. ​ In May 2015, a putative class action was commenced in the United States District Court for the Southern District of New York related to the company’s October 2014 announcement that it was divesting its global commercial semiconductor technology business, alleging violations of the Employee Retirement Income Security Act (ERISA). Management’s Retirement Plans Committee and three current or former IBM executives are named as defendants. On September 29, 2017, the Court granted the defendants’ motion to dismiss the first amended complaint. On December 10, 2018, the Second Circuit Court of Appeals reversed the District Court order. On January 14, 2020, the Supreme Court of the United States vacated the decision and remanded the case to the Second Circuit. On June 22, 2020, the Second Circuit reinstated its prior decision and remanded the case to the District Court. In February 2021, the parties reached an agreement to settle the matter subject to court approval. 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 $700 million. The company believes it will prevail on these matters and that this amount is not a meaningful indicator of liability.

Equity Activity

Equity Activity	3 Months Ended
	Mar. 31, 2021
Equity Activity
Equity Activity	14. Equity Activity: Reclassifications and Taxes Related to Items of Other Comprehensive Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) Before Tax Tax (Expense)/ Net of Tax For the three months ended March 31, 2021: ​ Amount ​ Benefit ​ Amount Other comprehensive income/(loss): ​ ​ ​ Foreign currency translation adjustments ​ $ 549 ​ $ (228) ​ $ 321 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 ​ $ 187 ​ $ (47) ​ $ 140 Reclassification of (gains)/losses to: ​ ​ ​ Cost of services ​ (14) ​ 3 ​ (10) Cost of sales ​ 22 ​ (6) ​ 16 Cost of financing ​ 6 ​ (2) ​ 4 SG&A expense ​ 15 ​ (4) ​ 11 Other (income) and expense ​ 116 ​ (29) ​ 87 Interest expense ​ 16 ​ (4) ​ 12 Total unrealized gains/(losses) on cash flow hedges ​ $ 347 ​ $ (88) ​ $ 259 Retirement-related benefit plans (1): ​ ​ ​ Prior service costs/(credits) ​ $ 0 ​ $ 0 ​ $ 0 Net (losses)/gains arising during the period ​ ​ 20 ​ ​ (6) ​ ​ 14 Curtailments and settlements ​ 17 ​ ​ (5) ​ ​ 12 Amortization of prior service (credits)/costs ​ 3 ​ ​ 0 ​ ​ 3 Amortization of net (gains)/losses ​ 648 ​ ​ (177) ​ ​ 471 Total retirement-related benefit plans ​ $ 689 ​ $ (189) ​ $ 500 Other comprehensive income/(loss) ​ $ 1,586 ​ $ (505) ​ $ 1,080 (1) These accumulated other comprehensive income (AOCI) components are included in the computation of net periodic pension cost. Refer to note 17, “Retirement-Related Benefits,” for additional information. Reclassifications and Taxes Related to Items of Other Comprehensive Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) Before Tax Tax (Expense)/ Net of Tax For the three months ended March 31, 2020: ​ Amount ​ Benefit ​ Amount Other comprehensive income/(loss): ​ ​ ​ Foreign currency translation adjustments ​ $ (919) ​ $ (122) ​ $ (1,041) 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 ​ $ (180) ​ $ 45 ​ $ (135) Reclassification of (gains)/losses to: ​ ​ ​ ​ ​ ​ Cost of services ​ (10) ​ 2 ​ (7) Cost of sales ​ (9) ​ 2 ​ (6) Cost of financing ​ 8 ​ (2) ​ 6 SG&A expense ​ (10) ​ 2 ​ (7) Other (income) and expense ​ 89 ​ (22) ​ 67 Interest expense ​ 22 ​ (5) ​ 16 Total unrealized gains/(losses) on cash flow hedges ​ $ (90) ​ $ 23 ​ $ (67) Retirement-related benefit plans (1): ​ ​ ​ Prior service costs/(credits) ​ $ (4) ​ $ 1 ​ $ (3) Net (losses)/gains arising during the period ​ ​ 8 ​ ​ (2) ​ ​ 6 Curtailments and settlements ​ 8 ​ ​ (3) ​ ​ 6 Amortization of prior service (credits)/costs ​ 1 ​ ​ 1 ​ ​ 1 Amortization of net (gains)/losses ​ 570 ​ ​ (157) ​ ​ 412 Total retirement-related benefit plans ​ $ 582 ​ $ (160) ​ $ 422 Other comprehensive income/(loss) ​ $ (427) ​ $ (260) ​ $ (686) (1) These AOCI components are included in the computation of net periodic pension cost. Refer to note 17, “Retirement-Related Benefits,” for additional information . ​ Accumulated Other Comprehensive Income/(Loss) (net of tax) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Change Net Unrealized ​ ​ ​ Net Unrealized ​ Foreign ​ Retirement- ​ Gains/(Losses) ​ Accumulated ​ ​ Gains/(Losses) ​ Currency ​ Related ​ on Available- ​ Other ​ ​ on Cash Flow ​ Translation ​ Benefit ​ For-Sale ​ Comprehensive (Dollars in millions) ​ Hedges ​ Adjustments* ​ Plans ​ Securities ​ Income/(Loss) January 1, 2021 ​ $ (456) ​ $ (4,665) ​ $ (24,216) ​ $ 0 ​ $ (29,337) Other comprehensive income before reclassifications ​ 140 ​ 321 ​ 14 ​ 0 ​ 475 Amount reclassified from accumulated other comprehensive income ​ 119 ​ — ​ 486 ​ — ​ 606 Total change for the period ​ $ 259 ​ $ 321 ​ $ 500 ​ $ 0 ​ $ 1,080 March 31, 2021 ​ $ (197) ​ $ (4,343) ​ $ (23,716) ​ $ (1) ​ $ (28,257) * Foreign currency translation adjustments are presented gross except for any associated hedges which are presented net of tax. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Change Net Unrealized ​ ​ ​ Net Unrealized ​ Foreign ​ Retirement- ​ Gains/(Losses) ​ Accumulated ​ ​ Gains/(Losses) ​ Currency ​ Related ​ on Available- ​ Other ​ ​ on Cash Flow ​ Translation ​ Benefit ​ For-Sale ​ Comprehensive (Dollars in millions) ​ Hedges ​ Adjustments* ​ Plans ​ Securities ​ Income/(Loss) January 1, 2020 ​ $ (179) ​ $ (3,700) ​ $ (24,718) ​ $ 0 ​ $ (28,597) Other comprehensive income before reclassifications ​ (135) ​ (1,041) ​ 3 ​ 0 ​ (1,174) Amount reclassified from accumulated other comprehensive income ​ 68 ​ — ​ 419 ​ — ​ 488 Total change for the period ​ $ (67) ​ $ (1,041) ​ $ 422 ​ $ 0 ​ $ (686) March 31, 2020 ​ $ (246) ​ $ (4,741) ​ $ (24,296) ​ $ 0 ​ $ (29,283) * Foreign currency translation adjustments are presented gross except for any associated hedges which are presented net of tax.

Derivative Financial Instrument

Derivative Financial Instruments	3 Months Ended
	Mar. 31, 2021
Derivative Financial Instruments
Derivative Financial Instruments	15. 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. No amount was recognized for the obligation to return or the right to reclaim cash collateral at March 31, 2021 and December 31, 2020. The company restricts the use of cash collateral received to rehypothecation, and therefore reports it in restricted cash in the Consolidated Balance Sheet. No amount was rehypothecated at March 31, 2021 and December 31, 2020. Additionally, if derivative exposures covered by a qualifying master netting agreement had been netted in the Consolidated Balance Sheet at March 31, December 31, In its hedging programs, the company may use forward contracts, futures contracts, interest-rate swaps, cross-currency swaps, equity swaps, and options depending upon the underlying exposure. The company is not a party to leveraged derivative instruments. A brief description of the major hedging programs, categorized by underlying risk, follows. Interest Rate Risk Fixed and Variable Rate Borrowings The company issues debt in the global capital markets to fund its operations and financing business. Access to cost-effective financing can result in interest rate mismatches with the underlying assets. To manage these mismatches and to reduce overall interest cost, the company may use interest-rate swaps to convert specific fixed-rate debt issuances into variable-rate debt (i.e., fair value hedges) and to convert specific variable-rate debt issuances into fixed-rate debt (i.e., cash flow hedges). At March 31, 2021 and December 31, 2020, the total notional amount of the company’s interest-rate swaps was $0.4 billion and $3.0 billion, respectively. In the first quarter of 2021, in addition to the scheduled swap maturities, the company terminated $1.25 billion of interest-rate swaps concurrent with the early redemption of the underlying hedged fixed-rate debt. The weighted-average remaining maturity of these instruments at March 31, 2021 and December 31, 2020 was approximately 2.0 years and 1.2 years, respectively. These interest-rate contracts were accounted for as fair value hedges. The company did not have any cash flow hedges relating to this program outstanding at March 31, 2021 and December 31, 2020. Forecasted Debt Issuance The company is exposed to interest rate volatility on future debt issuances. To manage this risk, the company may use instruments such as forward starting interest-rate swaps to lock in the rate on the interest payments related to the forecasted debt issuances. There were no instruments outstanding at March 31, 2021 and December 31, 2020. In connection with cash flow hedges of forecasted interest payments related to the company's borrowings, the company recorded net losses of $170 million and net losses of $174 million (before taxes) at March 31, 2021 and December 31, 2020, respectively, in AOCI. The company estimates that $18 million (before taxes) of the deferred net losses on derivatives in AOCI at March 31, 2021 will be reclassified to net income within the next 12 months, providing an offsetting economic impact against the underlying interest payments. Foreign Exchange Risk Long-Term Investments in Foreign Subsidiaries (Net Investment) A large portion of the company’s foreign currency denominated debt portfolio is designated as a hedge of net investment in foreign subsidiaries to reduce the volatility in stockholders’ equity caused by changes in foreign currency exchange rates in the functional currency of major foreign subsidiaries with respect to the U.S. dollar. At March 31, 2021 and December 31, 2020, the carrying value of debt designated as hedging instruments was $15.7 billion and $16.4 billion, respectively. The company also uses cross-currency swaps and foreign exchange forward contracts for this risk management purpose. At March 31, 2021 and December 31, 2020, the total notional amount of derivative instruments designated as net investment hedges was $8.2 billion and $7.2 billion, respectively. At March 31, 2021 and December 31, 2020, the weighted-average remaining maturity of these instruments was approximately 0.2 years and 0.3 years, respectively. Anticipated Royalties and Cost Transactions The company’s operations generate significant nonfunctional currency, third-party vendor payments and intercompany payments for royalties and goods and services among the company’s non-U.S. subsidiaries and with the company. In anticipation of these foreign currency cash flows and in view of the volatility of the currency markets, the company selectively employs foreign exchange forward contracts to manage its currency risk. These forward contracts are accounted for as cash flow hedges. The maximum remaining length of time over which the company hedged its exposure is approximately three years. At March 31, 2021 and December 31, 2020, the total notional amount of forward contracts designated as cash flow hedges of forecasted royalty and cost transactions was $7.7 billion and $8.0 billion, respectively. At March 31, 2021 and December 31, 2020, the weighted-average remaining maturity of these instruments was approximately 0.7 years at both periods. At March 31, 2021 and December 31, 2020, in connection with cash flow hedges of anticipated royalties and cost transactions, the company recorded net gains of $115 million and net losses of $192 million (before taxes), respectively, in AOCI. The company estimates that $30 million (before taxes) of deferred net gains on derivatives in AOCI at March 31, 2021 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 employs cross-currency swaps to convert fixed-rate foreign currency denominated debt to fixed-rate debt denominated in the functional currency of the borrowing entity. These swaps are accounted for as cash flow hedges. At March 31, 2021, the maximum length of time remaining over which the company hedged its exposure is approximately seven years. At March 31, 2021 and December 31, 2020, the total notional amount of cross-currency swaps designated as cash flow hedges of foreign currency denominated debt was $1.5 billion at both periods. At March 31, 2021 and December 31, 2020, in connection with cash flow hedges of foreign currency denominated borrowings, the company recorded net losses of $199 million and net losses of $236 million (before taxes), respectively, in AOCI. The company estimates that $24 million (before taxes) of deferred net losses on derivatives in AOCI at March 31, 2021 will be reclassified to net income within the next 12 months, providing an offsetting economic impact against the underlying exposure. 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 March 31, 2021 and December 31, 2020, the total notional amount of derivative instruments in economic hedges of foreign currency exposure was $6.1 billion and $6.8 billion, respectively. Equity Risk Management The company is exposed to market price changes in certain broad market indices and in the company’s own stock primarily related to certain obligations to employees. Changes in the overall value of these employee compensation obligations are recorded in SG&A expense in the Consolidated Income Statement. Although not designated as accounting hedges, the company utilizes derivatives, including equity swaps and futures, to economically hedge the exposures related to its employee compensation obligations. The derivatives are linked to the total return on certain broad market indices or the total return on the company’s common stock, and are recorded at fair value with gains or losses also reported in SG&A expense in the Consolidated Income Statement. At March 31, 2021 and December 31, 2020, the total notional amount of derivative instruments in economic hedges of these compensation obligations was $1.3 billion at both periods. Cumulative Basis Adjustments for Fair Value Hedges At March 31, 2021 and December 31, 2020, the following amounts were recorded in the Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, December 31, (Dollars in millions) ​ 2021 ​ 2020 Short-term debt: ​ ​ ​ Carrying amount of the hedged item ​ $ — ​ $ (1,302) ​ Cumulative hedging adjustments included in the carrying amount — assets/(liabilities) ​ — ​ (2) ​ Long-term debt: ​ ​ ​ Carrying amount of the hedged item ​ $ (781) ​ $ (2,097) ​ Cumulative hedging adjustments included in the carrying amount — assets/(liabilities)* ​ (357) ​ (424) ​ * Includes ($340) million and ($353) million of hedging adjustments on discontinued hedging relationships at March 31, 2021 and December 31, 2020, 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gains/(Losses) of (Dollars in millions) ​ Total ​ Total Hedge Activity For the three months ended March 31: 2021 2020 2021 2020 Cost of services ​ $ 7,775 ​ $ 7,843 ​ $ 14 ​ $ 10 ​ Cost of sales ​ 1,585 ​ 1,624 ​ (22) ​ 9 ​ Cost of financing ​ 165 ​ 181 ​ 2 ​ 3 ​ SG&A expense ​ 5,174 ​ 5,955 ​ 34 ​ (191) ​ Other (income) and expense ​ 362 ​ 182 ​ (160) ​ (101) ​ Interest expense ​ 280 ​ 326 ​ 5 ​ 10 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gain (Loss) Recognized in Consolidated Income Statement ​ ​ Consolidated ​ Recognized on ​ Attributable to Risk (Dollars in millions) ​ Income Statement ​ Derivatives ​ Being Hedged (2) For the three months ended March 31: Line Item 2021 2020 2021 2020 Derivative instruments in fair value hedges (1): ​ ​ ​ ​ Interest rate contracts Cost of financing ​ $ (1) ​ $ 18 ​ $ 7 ​ $ (13) ​ Interest expense ​ (1) ​ 49 ​ 18 ​ (37) Derivative instruments not designated as hedging instruments: ​ ​ ​ ​ Foreign exchange contracts Other (income) and expense ​ (44) ​ (11) ​ N/A ​ N/A Equity contracts SG&A expense ​ 49 ​ (201) ​ N/A ​ N/A Total ​ $ 3 ​ $ (146) ​ $ 25 ​ $ (50) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gain (Loss) Recognized in Consolidated Income Statement and Other Comprehensive Income (Dollars in millions) ​ ​ ​ ​ ​ ​ ​ Consolidated ​ Reclassified ​ Amounts Excluded from For the three months ​ Recognized in OCI ​ Income Statement ​ from AOCI ​ Effectiveness Testing (3) ended March 31: 2021 2020 Line Item 2021 2020 2021 2020 Derivative instruments in cash flow hedges: ​ ​ ​ ​ ​ ​ ​ ​ Interest rate contracts ​ $ — ​ $ — Cost of financing ​ $ (1) ​ $ (1) ​ $ — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ Interest expense ​ (3) ​ (3) ​ — ​ — ​ Foreign exchange contracts ​ 187 ​ (180) Cost of services ​ 14 ​ 10 ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ Cost of sales ​ (22) ​ 9 ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ Cost of financing ​ (5) ​ (7) ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ SG&A expense ​ (15) ​ 10 ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ Other (income) and expense ​ (116) ​ (89) ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ Interest expense ​ (13) ​ (18) ​ ​ — ​ ​ — ​ Instruments in net investment hedges (4): ​ ​ ​ ​ ​ ​ ​ Foreign exchange contracts ​ 907 ​ 485 Cost of financing ​ — ​ — ​ 2 ​ 7 ​ ​ ​ ​ ​ ​ Interest expense ​ — ​ — ​ 4 ​ 20 ​ Total ​ $ 1,094 ​ $ 304 ​ $ (160) ​ $ (91) ​ $ 6 ​ $ 27 ​ (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 three months ending March 31, 2021 and 2020, there were no material gains or losses excluded from the assessment of hedge effectiveness (for fair value or cash flow hedges), or associated with an underlying exposure that did not or was not expected to occur (for cash flow hedges); nor are there any anticipated in the normal course of business.

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Mar. 31, 2021
Stock-Based Compensation
Stock-Based Compensation	16. Stock-Based Compensation: Stock-based compensation cost is measured at grant date, based on the fair value of the award, and is recognized over the employee requisite service period. The following table presents total stock-based compensation cost included in income from continuing operations. ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) ​ ​ For the three months ended March 31: ​ 2021 ​ 2020 Cost ​ $ 41 ​ $ 27 Selling, general and administrative ​ 123 ​ 117 Research, development and engineering ​ 49 ​ 45 Pre-tax stock-based compensation cost ​ $ 213 ​ $ 189 Income tax benefits ​ (52) ​ (45) Total net stock-based compensation cost ​ $ 161 ​ $ 144 ​ Pre-tax stock-based compensation cost for the three months ended March 31, 2021 increased $24 million compared to the corresponding period in the prior year. This was due to increases in performance share units ($16 million) and restricted stock units ($8 million). In the first quarter of 2021, the company’s Executive Compensation and Management Resources Committee of the Board of Directors approved changes to certain outstanding performance share unit targets to include the impact of the planned spin-off of Kyndryl, along with actions taken to enable the separation and enable IBM’s growth strategy under current market conditions. The impact under modification accounting was not material. Total unrecognized compensation cost related to non-vested awards at March 31, 2021 was $1.2 billion and is expected to be recognized over a weighted-average period of approximately 2.1 years. Capitalized stock-based compensation cost was not material at March 31, 2021 and 2020.

Retirement-Related Benefits

Retirement-Related Benefits	3 Months Ended
	Mar. 31, 2021
Retirement-Related Benefits
Retirement-Related Benefits	17. Retirement-Related Benefits: The company offers defined benefit pension plans, defined contribution pension plans, as well as nonpension postretirement plans primarily consisting of retiree medical benefits. The following table provides the pre-tax cost for all retirement-related plans. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Yr. to Yr. (Dollars in millions) ​ ​ ​ ​ ​ ​ ​ Percent For the three months ended March 31: ​ 2021 ​ 2020 ​ Change Retirement-related plans — cost: ​ ​ ​ Defined benefit and contribution pension plans — cost ​ $ 672 ​ $ 584 15.2 % Nonpension postretirement plans — cost ​ 44 ​ 52 (14.5) ​ Total ​ $ 717 ​ $ 636 12.8 % ​ The following table provides the components of the cost/(income) for the company’s pension plans. Cost/(Income) of Pension Plans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) ​ U.S. Plan ​ Non-U.S. Plans For the three months ended March 31: 2021 2020 2021 2020 Service cost ​ $ — ​ $ — ​ $ 92 ​ $ 95 Interest cost (1) ​ 277 ​ 375 ​ 111 ​ 129 Expected return on plan assets (1) ​ (451) ​ (542) ​ (291) ​ (309) Amortization of prior service costs/(credits) (1) ​ 4 ​ 4 ​ (2) ​ (5) Recognized actuarial losses (1) ​ 249 ​ 207 ​ 375 ​ 342 Curtailments and settlements (1) ​ — ​ — ​ 17 ​ 8 Multi-employer plans ​ — ​ — ​ 8 ​ 7 Other costs/(credits) (1) ​ — ​ — ​ 11 ​ 5 Total net periodic pension (income)/cost of defined benefit plans ​ $ 80 ​ $ 44 ​ $ 322 ​ $ 274 Cost of defined contribution plans ​ 151 ​ 155 ​ 119 ​ 110 Total defined benefit and contribution pension plans cost recognized in the Consolidated Income Statement ​ $ 231 ​ $ 199 ​ $ 441 ​ $ 385 (1) These components of net periodic pension cost are included in other (income) and expense in the Consolidated Income Statement. ​ The following table provides the components of the cost for the company’s nonpension postretirement plans. Cost of Nonpension Postretirement Plans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) ​ U.S. Plan ​ Non-U.S. Plans For the three months ended March 31: 2021 2020 2021 2020 Service cost ​ $ 2 ​ $ 2 ​ $ 1 ​ $ 1 Interest cost (1) ​ 16 ​ 26 ​ 8 ​ 10 Expected return on plan assets (1) ​ — ​ — ​ (1) ​ (1) Amortization of prior service costs/(credits) (1) ​ 1 ​ 1 ​ 0 ​ 0 Recognized actuarial losses (1) ​ 13 ​ 7 ​ 4 ​ 6 Curtailments and settlements (1) ​ — ​ — ​ — ​ 0 Total nonpension postretirement plans cost recognized in the Consolidated Income Statement ​ $ 32 ​ $ 36 ​ $ 12 ​ $ 16 (1) These components of net periodic pension cost are included in other (income) and expense in the Consolidated Income Statement. ​ The company does not anticipate any significant changes to the expected plan contributions in 2021 from the amounts disclosed in the 2020 Annual Report. The table below includes contributions to the following plans: ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) ​ Plan Contributions For the three months ended March 31: 2021 2020 U.S. nonpension postretirement benefit plan ​ $ 106 ​ $ 136 Non-U.S. DB and multi-employer plans ​ 66 ​ 82 Total plan contributions ​ $ 172 ​ $ 217 ​ During the three months ended March 31, 2021 and 2020, the company contributed $150 million and $185 million of U.S Treasury Securities, respectively, to the non-U.S. DB plans and nonpension postretirement benefit plans. Additionally, during the three months ended March 31, 2021 and 2020, the company contributed $129 million and $70 million of U.S. Treasury Securities, respectively, to the Active Medical Trust. Contributions made with U.S. Treasury securities are considered a non-cash transaction. ​

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2021
Subsequent Events
Subsequent Events	18. Subsequent Events ​ On April 27, 2021, the company announced that the Board of Directors approved an increase in the quarterly dividend to $1.64 per common share. The dividend is payable June 10, 2021 to shareholders of record on May 10, 2021.

Significant Accounting Policies

Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2021
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). The financial statements and footnotes are unaudited. In the opinion of the company’s management, these statements include all adjustments, which are only of a normal recurring nature, necessary to present a fair statement of the company’s results of operations, financial position and cash flows. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amount of assets, liabilities, revenue, costs, expenses and other comprehensive income/(loss) that are reported in the Consolidated Financial Statements and accompanying disclosures. These estimates are based on management’s best knowledge of current events, historical experience, actions that the company may undertake in the future and on various other assumptions that are believed to be reasonable under the circumstances, including the macroeconomic impacts of the COVID-19 pandemic. As a result, actual results may be different from these estimates. On October 8, 2020, the company announced that it will separate the managed infrastructure services unit of its Global Technology Services (GTS) segment into a new public company. The managed infrastructure services unit is comprised of outsourcing and other infrastructure modernization and management services and the name of the new company will be Kyndryl. The separation is expected to be achieved through a U.S. federal tax-free spin-off to IBM shareholders and completed by the end of 2021. It will be subject to customary market, regulatory and other closing conditions, including final IBM Board of Directors’ approval. The announcement did not have any classification impact to the company’s Consolidated Financial Statements or segment reporting. IBM will report the managed infrastructure services unit as discontinued operations after separation. For the three months ended March 31, 2021, the company reported a benefit from income taxes of $51 million. The tax benefit was primarily driven by the resolution of certain tax audit matters in the first quarter of 2021. For the three months ended March 31, 2020, the company reported a benefit from income taxes of $1,226 million. The tax benefit was primarily related to the tax impacts of an intra-entity sale of certain of the company’s intellectual property. Noncontrolling interest amounts of $7.6 million and $4.5 million, net of tax, for the three months ended March 31, 2021 and 2020, respectively, are included as a reduction within other (income) and expense in the Consolidated Income Statement. Interim results are not necessarily indicative of financial results for a full year. The information included in this Form 10-Q should be read in conjunction with the company’s 2020 Annual Report. Within the financial statements and tables presented, certain columns and rows may not add due to the use of rounded numbers for disclosure purposes. Percentages presented are calculated from the underlying whole-dollar amounts. Certain prior period amounts have been reclassified to conform to the current period presentation. This is annotated where applicable.
Accounting Changes	Standards Implemented ​ Simplifying the Accounting for Income Taxes Standard/Description Effective Date and Adoption Considerations Effect on Financial Statements or Other Significant Matters Reference Rate Reform Standard/Description Effective Date and Adoption Considerations Effect on Financial Statements or Other Significant Matters Simplifying the Test for Goodwill Impairment Standard/Description Effective Date and Adoption Considerations Effect on Financial Statements or Other Significant Matters Financial Instruments–Credit Losses Standard/Description Effective Date and Adoption Considerations Effect on Financial Statements or Other Significant Matters
Revenue	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	Performance measurement is based on pre-tax income from continuing operations. These results are used, in part, by the chief operating decision maker, both in evaluating the performance of, and in allocating resources to, each of the segments.
Financial Instruments and Fair Value Measurement	Fair Value Measurements ​ Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The company classifies certain assets and liabilities based on the following fair value hierarchy: ​ ● Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities that can be accessed at the measurement date; ​ ● Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and ​ ● Level 3—Unobservable inputs for the asset or liability. ​ When available, the company uses unadjusted quoted market prices in active markets to measure the fair value and classifies such items as Level 1. If quoted market prices are not available, fair value is based upon internally developed models that use current market-based or independently sourced market parameters such as interest rates and currency rates. Items valued using internally generated models are classified according to the lowest level input or value driver that is significant to the valuation. ​ The determination of fair value considers various factors including interest rate yield curves and time value underlying the financial instruments. For derivatives and debt securities, the company uses a discounted cash flow analysis using discount rates commensurate with the duration of the instrument. ​ In determining the fair value of financial instruments, the company considers certain market valuation adjustments to the “base valuations” calculated using the methodologies described below for several parameters that market participants would consider in determining fair value: ​ ● Counterparty credit risk adjustments are applied to financial instruments, taking into account the actual credit risk of a counterparty as observed in the credit default swap market to determine the true fair value of such an instrument. ​ ● Credit risk adjustments are applied to reflect the company’s own credit risk when valuing all liabilities measured at fair value. The methodology is consistent with that applied in developing counterparty credit risk adjustments, but incorporates the company’s own credit risk as observed in the credit default swap market. ​ The company holds investments primarily in time deposits, certificates of deposit, and U.S. government debt that are designated as available-for-sale. The primary objective of the company’s cash and debt investment portfolio is to maintain principal by investing in very liquid and highly rated investment grade securities. ​ The company’s standard practice is to hold all of its debt security investments classified as available-for-sale until maturity. No impairment for credit losses and no material non-credit impairment were recorded for the three months ended March 31, 2021 and 2020, respectively. ​ Certain non-financial assets such as property, plant and equipment, operating right-of-use assets, land, goodwill and intangible assets are also subject to nonrecurring fair value measurements if they are deemed to be impaired. The impairment models used for non-financial assets depend on the type of asset. There were no material impairments of non-financial assets for the three months ended March 31, 2021 and 2020, respectively. ​
Financial Assets and Liabilities Not Measured At Fair Value	Financial Assets and Liabilities Not Measured at Fair Value ​ Short-Term Receivables and Payables ​ Notes and other accounts receivable 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 and including short-term finance lease liabilities) are financial liabilities with carrying values that approximate fair value. If measured at fair value in the financial statements, these financial instruments would be classified as Level 3 in the fair value hierarchy, except for short-term debt which would be classified as Level 2. ​ Loans and Long-Term Receivables ​ Fair values are based on discounted future cash flows using current interest rates offered for similar loans to clients with similar credit ratings for the same remaining maturities. At March 31, 2021 and December 31, 2020, 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 $51,206 million and $54,355 million, and the estimated fair value was $55,962 million and $61,598 million at March 31, 2021 and December 31, 2020, respectively. If measured at fair value in the financial statements, long-term debt (including the current portion) would be classified as Level 2 in the fair value hierarchy.
Financing Receivables	Financing receivables primarily consist of client loan and installment payment receivables (loans) and 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 hardware, software and services. Payment terms on these financing arrangements are generally for terms up to seven years. Investment in sales-type and direct financing leases relate principally to the company’s Systems products and are for terms ranging generally from two
Financing Receivables by Portfolio Segment	Financing Receivables by Portfolio Segment The following tables present the amortized cost basis for client financing receivables at March 31, 2021 and December 31, 2020, 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.
Allowance for Credit Losses - Financing Receivables	IBM continues to monitor the global impacts from the COVID-19 pandemic as well as its impact on external economic models. The company’s allowance for credit losses at March 31, 2021 and December 31, 2020 reflects the qualitative process which is described further in note A, “Significant Accounting Policies” in the company’s 2020 Annual Report. Any changes to economic models that occurred after the balance sheet date will be reflected in future periods.
Commitments	The company collectively evaluates the allowance for these arrangements using a provision methodology consistent with the portfolio of the commitments. Refer to note A, “Significant Accounting Policies” in the company’s 2020 Annual Report for additional information. The allowance for these commitments is recorded in other liabilities in the Consolidated Balance Sheet and was not material at March 31, 2021. The company has applied the guidance requiring a guarantor to disclose certain types of guarantees, even if the likelihood of requiring the guarantor’s performance is remote.
Contingencies	The company records a provision with respect to a claim, suit, investigation or proceeding when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Any recorded liabilities, including any changes to such liabilities for the quarter ended March 31, 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.
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
Derivative Contracts, Swaps and Options	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.
Derivatives, Methods of Accounting, Hedge Effectiveness	(3) The company’s policy is to recognize all fair value changes in amounts excluded from effectiveness testing in net income each period.
Stock-Based Compensation	Stock-based compensation cost is measured at grant date, based on the fair value of the award, and is recognized over the employee requisite service period. The following table presents total stock-based compensation cost included in income from continuing operations.

Revenue Recognition (Tables)

Revenue Recognition (Tables)	3 Months Ended
	Mar. 31, 2021
Revenue Recognition
Schedule of disaggregation of revenue	​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) ​ ​ For the three months ended March 31: ​ 2021 ​ 2020 Cloud & Data Platforms ​ $ 2,866 ​ $ 2,536 Cognitive Applications ​ ​ 1,233 ​ ​ 1,182 Transaction Processing Platforms ​ 1,338 ​ 1,520 Total Cloud & Cognitive Software ​ $ 5,437 ​ $ 5,238 Consulting ​ 2,189 ​ 2,071 Application Management ​ 1,770 ​ 1,840 Global Process Services ​ 274 ​ 225 Total Global Business Services ​ $ 4,234 ​ $ 4,136 Infrastructure & Cloud Services ​ 4,853 ​ 4,916 Technology Support Services ​ 1,517 ​ 1,550 Total Global Technology Services ​ $ 6,370 ​ $ 6,467 Systems Hardware ​ 1,114 ​ 997 Operating Systems Software ​ 313 ​ 371 Total Systems ​ $ 1,427 ​ $ 1,368 Global Financing* ​ 240 ​ 299 Other ​ 23 ​ 62 Total revenue ​ $ 17,730 ​ $ 17,571 * Contains lease and loan/working capital financing arrangements which are not subject to the guidance on revenue from contracts with customers.
Schedule of disaggregation of revenue by geography	​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) ​ For the three months ended March 31: ​ 2021 ​ 2020 Americas ​ $ 8,179 ​ $ 8,166 Europe/Middle East/Africa ​ 5,641 ​ 5,517 Asia Pacific ​ 3,909 ​ 3,888 Total ​ $ 17,730 ​ $ 17,571
Schedule of reconciliation of contract balances	​ ​ ​ ​ ​ ​ ​ ​ ​ At March 31, At December 31, (Dollars in millions) ​ 2021 ​ 2020 Notes and accounts receivable–trade (net of allowances of $345 in 2021 and $351 in 2020) ​ $ 6,458 ​ $ 7,132 Contract assets* ​ 522 ​ 497 Deferred income (current) ​ 14,197 ​ 12,833 Deferred income (noncurrent) ​ 4,153 ​ 4,301 * Included within prepaid expenses and other current assets in the Consolidated Balance Sheet.
Schedule of notes and accounts receivable - trade allowance for credit losses	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) ​ ​ ​ ​ January 1, 2021 ​ Additions / (Releases) ​ Write-offs ​ Other* ​ March 31, 2021 $ 351 ​ $ 1 ​ $ (6) ​ $ (2) ​ $ 345 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ January 1, 2020 ​ Additions / (Releases) ​ Write-offs ​ Other* ​ December 31, 2020 $ 316 ​ $ 76 ​ $ (46) ​ $ 5 ​ $ 351 * Primarily represents translation adjustments .

Segments (Tables)

Segments (Tables)	3 Months Ended
	Mar. 31, 2021
Segments
Revenue and Pre-tax Income by Segment	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cloud & Global Global ​ ​ ​ ​ ​ Cognitive ​ Business ​ Technology ​ ​ ​ ​ Global ​ Total (Dollars in millions) ​ Software ​ Services ​ Services ​ Systems ​ Financing ​ Segments For the three months ended March 31, 2021: ​ ​ ​ ​ ​ ​ ​ External revenue ​ $ 5,437 ​ $ 4,234 ​ $ 6,370 ​ $ 1,427 ​ $ 240 ​ $ 17,707 ​ Internal revenue ​ 832 ​ 55 ​ 313 ​ 189 ​ 168 ​ 1,557 ​ Total revenue ​ $ 6,269 ​ $ 4,289 ​ $ 6,683 ​ $ 1,616 ​ $ 408 ​ $ 19,264 ​ Pre-tax income/(loss) from continuing operations ​ $ 1,428 ​ $ 390 ​ $ 140 ​ $ (2) ​ $ 166 ​ $ 2,122 ​ Revenue year-to-year change ​ 3.6 % 2.5 % (1.2) % 6.6 % (20.2) % 1.3 % Pre-tax income/(loss) year-to-year change ​ 53.0 % 44.1 % nm nm ​ (14.2) % 111.6 % Pre-tax income/(loss) margin ​ 22.8 % 9.1 % 2.1 % (0.1) % 40.8 % 11.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the three months ended March 31, 2020: ​ ​ ​ ​ ​ ​ ​ External revenue ​ $ 5,238 ​ $ 4,136 ​ $ 6,467 ​ $ 1,368 ​ $ 299 ​ $ 17,508 ​ Internal revenue ​ 813 ​ 46 ​ 294 ​ 148 ​ 212 ​ 1,514 ​ Total revenue ​ $ 6,052 ​ $ 4,183 ​ $ 6,761 ​ $ 1,516 ​ $ 511 ​ $ 19,023 ​ Pre-tax income/(loss) from continuing operations ​ $ 933 ​ $ 271 ​ $ (178) ​ $ (217) ​ $ 194 ​ $ 1,003 ​ Pre-tax income/(loss) margin ​ 15.4 % 6.5 % (2.6) % (14.3) % 37.9 % 5.3 % nm - not meaningful
Reconciliation of segment revenue and pre-tax income to IBM as reported	​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) ​ ​ For the three months ended March 31: ​ 2021 ​ 2020 Revenue: ​ ​ ​ Total reportable segments ​ $ 19,264 ​ $ 19,023 ​ Other–divested businesses ​ 1 ​ 18 ​ Other revenue ​ 21 ​ 44 ​ Eliminations of internal transactions ​ (1,557) ​ (1,514) ​ Total consolidated revenue ​ $ 17,730 ​ $ 17,571 ​ ​ ​ ​ ​ ​ ​ ​ ​ Pre-tax income from continuing operations: ​ ​ ​ Total reportable segments ​ $ 2,122 ​ $ 1,003 ​ Amortization of acquired intangible assets ​ (452) ​ (473) ​ Acquisition-related (charges)/income ​ (16) ​ 0 ​ Non-operating retirement-related (costs)/income ​ (343) ​ (264) ​ Spin-off related charges ​ ​ (61) ​ ​ — ​ Elimination of internal transactions ​ (73) ​ (55) ​ Other – ​ (8) ​ 25 ​ Unallocated corporate amounts ​ (263) ​ (284) ​ Total pre-tax income/(loss) from continuing operations ​ $ 905 ​ $ (49) ​

Acquisitions & Divestitures (Ta

Acquisitions & Divestitures (Tables)	3 Months Ended
	Mar. 31, 2021
2021 Acquisitions
Acquisitions & Divestitures
Business acquisition, purchase price allocation	​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization ​ Total (Dollars in millions) Life (in years) ​ Acquisitions Current assets ​ ​ ​ $ 72 Property, plant and equipment/noncurrent assets ​ ​ ​ ​ 4 Intangible assets: ​ ​ ​ ​ ​ Goodwill N/A ​ ​ 746 Client relationships 7 ​ ​ 134 Completed technology 3-7 ​ ​ 114 Trademarks 2-6 ​ ​ 27 Total assets acquired ​ ​ ​ $ 1,097 Current liabilities ​ ​ ​ ​ 48 Noncurrent liabilities ​ ​ ​ ​ 62 Total liabilities assumed ​ ​ ​ $ 110 Total purchase price ​ ​ ​ $ 987 N/A - not applicable

Earnings Per Share of Common _2

Earnings Per Share of Common Stock (Tables)	3 Months Ended
	Mar. 31, 2021
Earnings Per Share of Common Stock
Computation of basic and diluted earnings per share	​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions except per share amounts) ​ ​ For the three months ended March 31: 2021 2020 Number of shares on which basic earnings per share is calculated: ​ ​ Weighted-average shares outstanding during period ​ 893,630,916 ​ 887,969,345 Add — Incremental shares under stock-based compensation plans ​ 6,622,441 ​ 5,740,415 Add — Incremental shares associated with contingently issuable shares ​ 1,492,709 ​ 1,329,477 Number of shares on which diluted earnings per share is calculated ​ 901,746,065 ​ 895,039,238 ​ ​ ​ ​ ​ ​ ​ Income from continuing operations ​ $ 956 ​ $ 1,176 Income/(loss) from discontinued operations, net of tax ​ (1) ​ (1) Net income on which basic earnings per share is calculated ​ $ 955 ​ $ 1,175 ​ ​ ​ ​ ​ ​ ​ Income from continuing operations ​ $ 956 ​ $ 1,176 Net income applicable to contingently issuable shares ​ — ​ (2) Income from continuing operations on which diluted earnings per share is calculated ​ $ 956 ​ $ 1,174 Income/(loss) from discontinued operations, net of tax, on which basic and diluted earnings per share is calculated ​ (1) ​ (1) Net income on which diluted earnings per share is calculated ​ $ 955 ​ $ 1,173 ​ ​ ​ ​ ​ ​ ​ Earnings/(loss) per share of common stock: ​ ​ Assuming dilution ​ ​ Continuing operations ​ $ 1.06 ​ $ 1.31 Discontinued operations ​ 0.00 ​ 0.00 Total ​ $ 1.06 ​ $ 1.31 Basic ​ ​ Continuing operations ​ $ 1.07 ​ $ 1.32 Discontinued operations ​ 0.00 ​ 0.00 Total ​ $ 1.07 ​ $ 1.32

Financial Assets & Liabilities

Financial Assets & Liabilities (Tables)	3 Months Ended
	Mar. 31, 2021
Financial Assets & Liabilities
Financial assets and financial liabilities measured at fair value on a recurring basis	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value ​ ​ ​ ​ ​ ​ Hierarchy ​ At March 31, 2021 ​ At December 31, 2020 (Dollars in millions) Level Assets (7) Liabilities (8) Assets (7) Liabilities (8) Cash equivalents: (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Time deposits and certificates of deposit (2) ​ 2 ​ $ 5,943 ​ $ N/A ​ $ 7,668 ​ $ N/A Money market funds ​ 1 ​ ​ 141 ​ ​ N/A ​ ​ 148 ​ ​ N/A U.S. government securities (2) ​ 2 ​ ​ — ​ ​ N/A ​ ​ 500 ​ ​ N/A Total cash equivalents ​ ​ ​ $ 6,084 ​ $ N/A ​ $ 8,316 ​ $ N/A Equity investments (3) ​ 1 ​ ​ 1 ​ ​ N/A ​ ​ 2 ​ ​ N/A Debt securities-current (2)(4) ​ 2 ​ ​ 600 ​ ​ N/A ​ ​ 600 ​ ​ N/A Debt securities-noncurrent (2)(5) ​ 2 ​ ​ 6 ​ ​ N/A ​ ​ 7 ​ ​ N/A Derivatives designated as hedging instruments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest rate contracts ​ 2 ​ ​ 20 ​ ​ — ​ ​ 100 ​ ​ — Foreign exchange contracts ​ 2 ​ ​ 404 ​ ​ 276 ​ ​ 111 ​ ​ 580 Derivatives not designated as hedging instruments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign exchange contracts ​ 2 ​ ​ 13 ​ ​ 50 ​ ​ 13 ​ ​ 47 Equity contracts (6) ​ 1,2 ​ ​ 13 ​ ​ 6 ​ ​ 12 ​ ​ — Total ​ ​ ​ $ 7,141 ​ $ 332 ​ $ 9,161 ​ $ 627 (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) Included within investments and sundry assets in the Consolidated Balance Sheet. (4) Primarily includes U.S. treasury bills that are reported within marketable securities in the Consolidated Balance Sheet. (5) Primarily includes government debt securities that are reported within investments and sundry assets in the Consolidated Balance Sheet. (6) Level 1 includes immaterial amounts related to equity futures contracts. (7) The gross balances of derivative assets contained within prepaid expenses and other current assets, and investments and sundry assets in the Consolidated Balance Sheet at March 31, 2021 were $386 million and $64 million, respectively, and at December 31, 2020 were $85 million and $151 million, respectively. (8) The gross balances of derivative liabilities contained within other accrued expenses and liabilities, and other liabilities in the Consolidated Balance Sheet at March 31, 2021 were $277 million and $55 million, respectively, and at December 31, 2020 were $587 million and $40 million , respectively. ​ N/A - not applicable

Financing Receivables (Tables)

Financing Receivables (Tables)	3 Months Ended
	Mar. 31, 2021
Financing Receivables
Summary of the components of financing receivables	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Client Financing Receivables ​ ​ ​ ​ ​ ​ ​ Client Loan and Investment in ​ ​ ​ ​ Installment Payment ​ Sales-Type and ​ Commercial ​ ​ ​ (Dollars in millions) ​ Receivables ​ Direct Financing ​ Financing ​ ​ ​ At March 31, 2021: ​ (Loans) ​ Leases ​ Receivables ​ Total Financing receivables, gross ​ $ 10,218 ​ $ 3,923 ​ $ 1,119 ​ $ 15,261 Unearned income ​ ​ (421) ​ (290) ​ ​ 0 ​ ​ (711) Residual value* ​ ​ — ​ 430 ​ ​ — ​ ​ 430 Amortized cost ​ $ 9,797 ​ $ 4,064 ​ $ 1,119 ​ $ 14,980 Allowance for credit losses ​ ​ (154) ​ (74) ​ ​ (7) ​ ​ (236) Total financing receivables, net ​ $ 9,643 ​ $ 3,989 ​ $ 1,112 ​ $ 14,744 Current portion ​ $ 6,050 ​ $ 1,660 ​ $ 1,112 ​ $ 8,822 Noncurrent portion ​ $ 3,592 ​ $ 2,329 ​ $ — ​ $ 5,922 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Client Financing Receivables ​ ​ ​ ​ ​ ​ ​ Client Loan and Investment in ​ ​ ​ ​ Installment Payment ​ Sales-Type and ​ Commercial ​ ​ ​ (Dollars in millions) ​ Receivables ​ Direct Financing ​ Financing ​ ​ ​ At December 31, 2020: ​ (Loans) ​ Leases ​ Receivables ​ Total Financing receivables, gross ​ $ 12,159 ​ $ 4,001 ​ $ 2,419 ​ $ 18,580 Unearned income ​ ​ (488) ​ ​ (335) ​ ​ 0 ​ ​ (823) Residual value* ​ ​ — ​ 485 ​ ​ — ​ ​ 485 Amortized cost ​ $ 11,671 ​ $ 4,151 ​ $ 2,419 ​ $ 18,242 Allowance for credit losses ​ ​ (173) ​ (82) ​ ​ (8) ​ ​ (263) Total financing receivables, net ​ $ 11,498 ​ $ 4,069 ​ $ 2,411 ​ $ 17,979 Current portion ​ $ 6,955 ​ $ 1,525 ​ $ 2,411 ​ $ 10,892 Noncurrent portion ​ $ 4,542 ​ $ 2,544 ​ $ — ​ $ 7,086 * Includes guaranteed and unguaranteed residual value.
Schedule of financing receivables and allowance for credit losses by class	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) ​ ​ ​ ​ At March 31, 2021: ​ Americas ​ EMEA ​ Asia Pacific ​ Total Amortized cost $ 6,867 ​ $ 4,244 ​ $ 2,750 ​ $ 13,861 Allowance for credit losses ​ ​ ​ ​ Beginning balance at January 1, 2021 ​ $ 141 ​ $ 77 ​ $ 37 ​ $ 255 Write-offs ​ ​ (2) ​ ​ (1) ​ ​ (6) ​ ​ (9) Recoveries ​ 0 ​ 0 ​ ​ 0 ​ ​ 1 Additions/(releases) ​ (11) ​ 2 ​ ​ (3) ​ ​ (12) Other* ​ (3) ​ (3) ​ ​ 0 ​ ​ (6) Ending balance at March 31, 2021 ​ $ 125 ​ $ 76 ​ $ 27 ​ $ 229 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) ​ ​ ​ ​ At December 31, 2020: ​ Americas ​ EMEA ​ Asia Pacific ​ Total Amortized cost $ 7,758 ​ $ 5,023 ​ $ 3,042 ​ $ 15,822 Allowance for credit losses ​ ​ ​ ​ Beginning balance at January 1, 2020 ​ $ 142 ​ $ 69 ​ $ 41 ​ $ 252 Write-offs ​ $ (28) ​ $ (3) ​ $ (3) ​ $ (34) Recoveries ​ 0 ​ 0 ​ ​ 2 ​ ​ 3 Additions/(releases) ​ 33 ​ 5 ​ ​ (4) ​ ​ 34 Other* ​ (6) ​ 6 ​ ​ 1 ​ ​ 1 Ending balance at December 31, 2020 ​ $ 141 ​ $ 77 ​ $ 37 ​ $ 255 * Primarily represents translation adjustments.
Schedule of past due financing receivables	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortized Billed Amortized ​ ​ Total ​ Amortized ​ Cost ​ Invoices ​ Cost (Dollars in millions) ​ Amortized ​ Cost ​ > 90 Days and ​ > 90 Days and ​ Not At March 31, 2021: ​ Cost ​ > 90 Days (1) ​ Accruing (1) ​ Accruing ​ Accruing (2) Americas ​ $ 6,867 ​ $ 271 ​ $ 182 ​ $ 11 ​ $ 94 EMEA ​ 4,244 ​ ​ 102 ​ ​ 14 ​ ​ 3 ​ ​ 93 Asia Pacific ​ 2,750 ​ ​ 32 ​ ​ 9 ​ ​ 4 ​ ​ 24 Total client financing receivables ​ $ 13,861 ​ $ 405 ​ $ 205 ​ $ 18 ​ $ 212 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortized Billed Amortized ​ ​ Total ​ Amortized ​ Cost ​ Invoices ​ Cost (Dollars in millions) ​ Amortized ​ Cost ​ > 90 Days and ​ > 90 Days and ​ Not At December 31, 2020: ​ Cost ​ > 90 Days (1) ​ Accruing (1) ​ Accruing ​ Accruing (2) Americas ​ $ 7,758 ​ $ 295 ​ $ 200 ​ $ 12 ​ $ 96 EMEA ​ 5,023 ​ ​ 119 ​ ​ 28 ​ ​ 5 ​ ​ 95 Asia Pacific ​ 3,042 ​ ​ 42 ​ ​ 12 ​ ​ 4 ​ ​ 32 Total client financing receivables ​ $ 15,822 ​ $ 456 ​ $ 241 ​ $ 20 ​ $ 223 (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 $167 million and $178 million at March 31, 2021 and December 31, 2020, respectively. Financing income recognized on these receivables was immaterial for the three months ended March 31, 2021 and 2020, respectively. ​
Schedule of amortized cost/net recorded investment by credit quality indicator	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) ​ Americas EMEA Asia Pacific At March 31, 2021: Aaa – Baa3 Ba1 – D Aaa – Baa3 Ba1 – D Aaa – Baa3 Ba1 – D Vintage year: ​ ​ ​ ​ ​ ​ 2021 ​ $ 808 ​ $ 421 ​ $ 310 ​ $ 349 ​ $ 253 ​ $ 105 2020 ​ ​ 1,966 ​ ​ 923 ​ ​ 1,086 ​ ​ 887 ​ ​ 721 ​ ​ 230 2019 ​ 871 ​ ​ 457 ​ ​ 471 ​ ​ 431 ​ ​ 499 ​ ​ 94 2018 ​ 666 ​ ​ 283 ​ ​ 311 ​ ​ 166 ​ ​ 365 ​ ​ 133 2017 ​ 206 ​ ​ 117 ​ ​ 43 ​ ​ 103 ​ ​ 165 ​ ​ 40 2016 and prior ​ 56 ​ ​ 92 ​ ​ 34 ​ ​ 53 ​ ​ 109 ​ ​ 36 Total ​ $ 4,573 ​ $ 2,294 ​ $ 2,254 ​ $ 1,989 ​ $ 2,111 ​ $ 639 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) ​ Americas ​ EMEA ​ Asia Pacific At December 31, 2020: Aaa – Baa3 Ba1 – D Aaa – Baa3 Ba1 – D Aaa – Baa3 Ba1 – D Vintage year: ​ ​ ​ ​ ​ ​ 2020 ​ $ 2,818 ​ $ 1,449 ​ $ 1,513 ​ $ 1,427 ​ $ 958 ​ $ 351 2019 ​ 988 ​ ​ 623 ​ ​ 668 ​ ​ 519 ​ ​ 564 ​ ​ 123 2018 ​ 829 ​ ​ 360 ​ ​ 329 ​ ​ 245 ​ ​ 419 ​ ​ 167 2017 ​ 285 ​ ​ 154 ​ ​ 70 ​ ​ 128 ​ ​ 205 ​ ​ 52 2016 ​ 90 ​ ​ 52 ​ ​ 33 ​ ​ 46 ​ ​ 114 ​ ​ 33 2015 and prior ​ 28 ​ ​ 81 ​ ​ 22 ​ ​ 22 ​ ​ 38 ​ ​ 18 Total ​ $ 5,038 ​ $ 2,720 ​ $ 2,635 ​ $ 2,387 ​ $ 2,298 ​ $ 743

Leases (Tables)

Leases (Tables)	3 Months Ended
	Mar. 31, 2021
Leases
Schedule of amounts included in the Consolidated Income Statement related to lessor activity	​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) ​ For the three months ended March 31: ​ 2021 2020 Lease income – sales-type and direct financing leases: ​ ​ ​ Sales-type lease selling price ​ $ 363 ​ $ 211 Less: Carrying value of underlying assets* ​ 59 ​ 76 Gross profit ​ $ 304 ​ $ 135 Interest income on lease receivables ​ 51 ​ 74 Total sales-type and direct financing lease income ​ $ 355 ​ $ 208 Lease income – operating leases ​ 51 ​ 71 Variable lease income ​ 57 ​ 30 Total lease income ​ $ 463 ​ $ 310 * Excludes unguaranteed residual value.

Intangible Assets Including G_2

Intangible Assets Including Goodwill (Tables)	3 Months Ended
	Mar. 31, 2021
Intangible Assets Including Goodwill
Intangible asset balances by major asset class	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At March 31, 2021 ​ Gross Carrying Accumulated Net Carrying (Dollars in millions) ​ Amount ​ Amortization ​ Amount* Intangible asset class: ​ ​ ​ ​ ​ ​ ​ ​ ​ Capitalized software ​ $ 1,854 ​ $ (837) ​ $ 1,017 Client relationships ​ 8,874 ​ (2,275) ​ 6,599 Completed technology ​ 5,972 ​ (1,784) ​ 4,188 Patents/trademarks ​ 2,196 ​ (480) ​ 1,717 Other** ​ 56 ​ (41) ​ 14 Total ​ $ 18,952 ​ $ (5,417) ​ $ 13,535 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, 2020 ​ Gross Carrying Accumulated Net Carrying (Dollars in millions) ​ Amount ​ Amortization ​ Amount* Intangible asset class: ​ ​ ​ ​ ​ ​ ​ ​ ​ Capitalized software ​ $ 1,777 ​ $ (814) ​ $ 963 Client relationships ​ 8,838 ​ (2,056) ​ 6,783 Completed technology ​ 5,957 ​ (1,671) ​ 4,286 Patents/trademarks ​ 2,246 ​ (499) ​ 1,747 Other** ​ 56 ​ (39) ​ 16 Total ​ $ 18,874 ​ $ (5,079) ​ $ 13,796 * Amounts as of March 31, 2021 and December 31, 2020 include a decrease in net intangible asset balances of $137 million and an increase of $279 million, respectively, due to foreign currency translation. ** Other intangibles are primarily acquired proprietary and non-proprietary business processes, methodologies and systems .
Intangible assets, future amortization expense	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capitalized Acquired ​ (Dollars in millions) ​ Software ​ Intangibles ​ Total Remainder of 2021 ​ $ 469 ​ $ 1,379 ​ $ 1,848 2022 ​ 368 ​ 1,774 ​ 2,142 2023 ​ 168 ​ 1,459 ​ 1,627 2024 ​ 12 ​ 1,408 ​ 1,420 2025 ​ — ​ 1,389 ​ 1,389 Thereafter ​ ​ — ​ ​ 5,109 ​ 5,109
Changes in goodwill balances by reportable segment	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Currency ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Purchase ​ Translation ​ ​ ​ (Dollars in millions) ​ Balance ​ Goodwill ​ Price ​ and Other ​ Balance Segment ​ 1/1/2021 ​ Additions ​ Adjustments ​ Adjustments* ​ 3/31/2021 Cloud & Cognitive Software ​ $ 43,934 ​ $ 245 ​ $ 6 ​ $ (249) ​ $ 43,935 Global Business Services ​ 6,145 ​ 501 ​ 0 ​ (61) ​ 6,585 Global Technology Services ​ 7,245 ​ — ​ — ​ (70) ​ 7,175 Systems ​ 2,293 ​ — ​ 0 ​ (4) ​ 2,289 Total ​ $ 59,617 ​ $ 746 ​ $ 6 ​ $ (384) ​ $ 59,984 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Currency ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Purchase ​ Translation ​ ​ ​ (Dollars in millions) ​ Balance ​ Goodwill ​ Price ​ and Other ​ Balance Segment ​ 1/1/2020 ​ Additions ​ Adjustments ​ Adjustments* ​ 12/31/2020 Cloud & Cognitive Software ​ $ 43,037 ​ $ 362 ​ $ (139) ​ $ 675 ​ $ 43,934 Global Business Services ​ 5,775 ​ 205 ​ — ​ 165 ​ 6,145 Global Technology Services ​ 7,141 ​ — ​ — ​ 104 ​ 7,245 Systems ​ 2,270 ​ 8 ​ — ​ 15 ​ 2,293 Total ​ $ 58,222 ​ $ 575 ​ $ (139) ​ $ 960 ​ $ 59,617 * Primarily driven by foreign currency translation.

Borrowings (Tables)

Borrowings (Tables)	3 Months Ended
	Mar. 31, 2021
Borrowings
Short-Term Debt	​ ​ ​ ​ ​ ​ ​ ​ ​ At March 31, At December 31, (Dollars in millions) ​ 2021 ​ 2020 Short-term loans ​ $ 36 ​ $ 130 Long-term debt – ​ 5,162 ​ 7,053 Total ​ $ 5,198 ​ $ 7,183
Long-Term Debt	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance Balance (Dollars in millions) ​ Maturities ​ 3/31/2021 ​ 12/31/2020 U.S. dollar debt (weighted-average interest rate at March 31, 2021):* ​ ​ 0.7% 2021 ​ $ 2,635 ​ $ 5,499 2.6% 2022 ​ 5,712 ​ 6,233 3.5% 2023 ​ 1,636 ​ 2,395 3.3% 2024 ​ 5,025 ​ 5,029 6.8% 2025 ​ 626 ​ 631 3.3% 2026 ​ 4,368 ​ 4,370 3.0% 2027 ​ 2,219 ​ 2,219 6.5% 2028 ​ ​ 313 ​ 313 3.5% ​ 2029 ​ ​ 3,250 ​ ​ 3,250 2.0% ​ 2030 ​ ​ 1,350 ​ ​ 1,350 5.9% 2032 ​ 600 ​ 600 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 7.1% 2096 ​ 316 ​ 316 ​ ​ ​ ​ $ 37,062 ​ $ 41,218 Other currencies (weighted-average interest rate at March 31, 2021, in parentheses):* ​ ​ Euro (1.1%) 2021–2040 ​ $ 17,618 ​ $ 18,355 Pound sterling (2.6%) 2022 ​ 414 ​ 411 Japanese yen (0.3%) 2022–2026 ​ 1,316 ​ 1,409 Other (4.4%) 2021–2025 ​ 299 ​ 324 ​ ​ ​ ​ $ 56,708 ​ $ 61,718 Finance lease obligations (1.5%) ​ 2021–2030 ​ ​ 317 ​ ​ 296 ​ ​ ​ ​ $ 57,025 ​ $ 62,013 Less: net unamortized discount ​ 868 ​ 875 Less: net unamortized debt issuance costs ​ 147 ​ 156 Add: fair value adjustment** ​ 357 ​ 426 ​ ​ ​ ​ $ 56,367 ​ $ 61,408 Less: current maturities ​ 5,162 ​ 7,053 Total ​ $ 51,206 ​ $ 54,355 * Includes notes, debentures, bank loans and secured borrowings. ** The portion of the company’s fixed-rate debt obligations that is hedged is reflected in the Consolidated Balance Sheet as an amount equal to the sum of the debt’s carrying value and a fair value adjustment representing changes in the fair value of the hedged debt obligations attributable to movements in benchmark interest rates.
Pre-swap annual contractual obligations of long-term debt outstanding	Pre-swap annual contractual obligations of long-term debt outstanding at March 31, 2021, are as follows: ​ ​ ​ ​ ​ (Dollars in millions) Total Remainder of 2021 ​ $ 4,060 2022 ​ 6,826 2023 ​ 4,928 2024 ​ 6,442 2025 ​ 4,144 Thereafter ​ 30,625 Total ​ $ 57,025
Interest on Debt	​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) ​ ​ For the three months ended March 31: ​ 2021 ​ 2020 Cost of financing ​ $ 106 ​ $ 119 Interest expense ​ 280 ​ 326 Interest capitalized ​ 2 ​ 5 Total interest paid and accrued ​ $ 388 ​ $ 449

Commitments (Tables)

Commitments (Tables)	3 Months Ended
	Mar. 31, 2021
Commitments
Changes in warranty liabilities	Standard Warranty Liability ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) 2021 2020 Balance at January 1 ​ $ 83 ​ $ 113 Current period accruals ​ 16 ​ 20 Accrual adjustments to reflect actual experience ​ (4) ​ (6) Charges incurred ​ (23) ​ (26) Balance at March 31 ​ $ 72 ​ $ 100 ​ Extended Warranty Liability (Deferred Income) ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) 2021 2020 Balance at January 1 ​ $ 425 ​ $ 477 Revenue deferred for new extended warranty contracts ​ 18 ​ 40 Amortization of deferred revenue ​ (53) ​ (57) Other* ​ (6) ​ (13) Balance at March 31 ​ $ 383 ​ $ 447 Current portion ​ $ 199 ​ $ 219 Noncurrent portion ​ $ 185 ​ $ 228 * Other primarily consists of foreign currency translation adjustments.

Equity Activity (Tables)

Equity Activity (Tables)	3 Months Ended
	Mar. 31, 2021
Equity Activity
Reclassifications and taxes related to items of other comprehensive income	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) Before Tax Tax (Expense)/ Net of Tax For the three months ended March 31, 2021: ​ Amount ​ Benefit ​ Amount Other comprehensive income/(loss): ​ ​ ​ Foreign currency translation adjustments ​ $ 549 ​ $ (228) ​ $ 321 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 ​ $ 187 ​ $ (47) ​ $ 140 Reclassification of (gains)/losses to: ​ ​ ​ Cost of services ​ (14) ​ 3 ​ (10) Cost of sales ​ 22 ​ (6) ​ 16 Cost of financing ​ 6 ​ (2) ​ 4 SG&A expense ​ 15 ​ (4) ​ 11 Other (income) and expense ​ 116 ​ (29) ​ 87 Interest expense ​ 16 ​ (4) ​ 12 Total unrealized gains/(losses) on cash flow hedges ​ $ 347 ​ $ (88) ​ $ 259 Retirement-related benefit plans (1): ​ ​ ​ Prior service costs/(credits) ​ $ 0 ​ $ 0 ​ $ 0 Net (losses)/gains arising during the period ​ ​ 20 ​ ​ (6) ​ ​ 14 Curtailments and settlements ​ 17 ​ ​ (5) ​ ​ 12 Amortization of prior service (credits)/costs ​ 3 ​ ​ 0 ​ ​ 3 Amortization of net (gains)/losses ​ 648 ​ ​ (177) ​ ​ 471 Total retirement-related benefit plans ​ $ 689 ​ $ (189) ​ $ 500 Other comprehensive income/(loss) ​ $ 1,586 ​ $ (505) ​ $ 1,080 (1) These accumulated other comprehensive income (AOCI) components are included in the computation of net periodic pension cost. Refer to note 17, “Retirement-Related Benefits,” for additional information. Reclassifications and Taxes Related to Items of Other Comprehensive Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) Before Tax Tax (Expense)/ Net of Tax For the three months ended March 31, 2020: ​ Amount ​ Benefit ​ Amount Other comprehensive income/(loss): ​ ​ ​ Foreign currency translation adjustments ​ $ (919) ​ $ (122) ​ $ (1,041) 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 ​ $ (180) ​ $ 45 ​ $ (135) Reclassification of (gains)/losses to: ​ ​ ​ ​ ​ ​ Cost of services ​ (10) ​ 2 ​ (7) Cost of sales ​ (9) ​ 2 ​ (6) Cost of financing ​ 8 ​ (2) ​ 6 SG&A expense ​ (10) ​ 2 ​ (7) Other (income) and expense ​ 89 ​ (22) ​ 67 Interest expense ​ 22 ​ (5) ​ 16 Total unrealized gains/(losses) on cash flow hedges ​ $ (90) ​ $ 23 ​ $ (67) Retirement-related benefit plans (1): ​ ​ ​ Prior service costs/(credits) ​ $ (4) ​ $ 1 ​ $ (3) Net (losses)/gains arising during the period ​ ​ 8 ​ ​ (2) ​ ​ 6 Curtailments and settlements ​ 8 ​ ​ (3) ​ ​ 6 Amortization of prior service (credits)/costs ​ 1 ​ ​ 1 ​ ​ 1 Amortization of net (gains)/losses ​ 570 ​ ​ (157) ​ ​ 412 Total retirement-related benefit plans ​ $ 582 ​ $ (160) ​ $ 422 Other comprehensive income/(loss) ​ $ (427) ​ $ (260) ​ $ (686) (1) These AOCI components are included in the computation of net periodic pension cost. Refer to note 17, “Retirement-Related Benefits,” for additional information .
Accumulated other comprehensive income/(loss) (net of tax)	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Change Net Unrealized ​ ​ ​ Net Unrealized ​ Foreign ​ Retirement- ​ Gains/(Losses) ​ Accumulated ​ ​ Gains/(Losses) ​ Currency ​ Related ​ on Available- ​ Other ​ ​ on Cash Flow ​ Translation ​ Benefit ​ For-Sale ​ Comprehensive (Dollars in millions) ​ Hedges ​ Adjustments* ​ Plans ​ Securities ​ Income/(Loss) January 1, 2021 ​ $ (456) ​ $ (4,665) ​ $ (24,216) ​ $ 0 ​ $ (29,337) Other comprehensive income before reclassifications ​ 140 ​ 321 ​ 14 ​ 0 ​ 475 Amount reclassified from accumulated other comprehensive income ​ 119 ​ — ​ 486 ​ — ​ 606 Total change for the period ​ $ 259 ​ $ 321 ​ $ 500 ​ $ 0 ​ $ 1,080 March 31, 2021 ​ $ (197) ​ $ (4,343) ​ $ (23,716) ​ $ (1) ​ $ (28,257) * Foreign currency translation adjustments are presented gross except for any associated hedges which are presented net of tax. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Change Net Unrealized ​ ​ ​ Net Unrealized ​ Foreign ​ Retirement- ​ Gains/(Losses) ​ Accumulated ​ ​ Gains/(Losses) ​ Currency ​ Related ​ on Available- ​ Other ​ ​ on Cash Flow ​ Translation ​ Benefit ​ For-Sale ​ Comprehensive (Dollars in millions) ​ Hedges ​ Adjustments* ​ Plans ​ Securities ​ Income/(Loss) January 1, 2020 ​ $ (179) ​ $ (3,700) ​ $ (24,718) ​ $ 0 ​ $ (28,597) Other comprehensive income before reclassifications ​ (135) ​ (1,041) ​ 3 ​ 0 ​ (1,174) Amount reclassified from accumulated other comprehensive income ​ 68 ​ — ​ 419 ​ — ​ 488 Total change for the period ​ $ (67) ​ $ (1,041) ​ $ 422 ​ $ 0 ​ $ (686) March 31, 2020 ​ $ (246) ​ $ (4,741) ​ $ (24,296) ​ $ 0 ​ $ (29,283) * Foreign currency translation adjustments are presented gross except for any associated hedges which are presented net of tax.

Derivative Financial Instrume_2

Derivative Financial Instruments (Tables)	3 Months Ended
	Mar. 31, 2021
Derivative Financial Instruments
Amounts related to cumulative basis adjustments for fair value hedges	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, December 31, (Dollars in millions) ​ 2021 ​ 2020 Short-term debt: ​ ​ ​ Carrying amount of the hedged item ​ $ — ​ $ (1,302) ​ Cumulative hedging adjustments included in the carrying amount — assets/(liabilities) ​ — ​ (2) ​ Long-term debt: ​ ​ ​ Carrying amount of the hedged item ​ $ (781) ​ $ (2,097) ​ Cumulative hedging adjustments included in the carrying amount — assets/(liabilities)* ​ (357) ​ (424) ​ * Includes ($340) million and ($353) million of hedging adjustments on discontinued hedging relationships at March 31, 2021 and December 31, 2020, respectively.
Effect of derivative instruments in the consolidated income statement	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gains/(Losses) of (Dollars in millions) ​ Total ​ Total Hedge Activity For the three months ended March 31: 2021 2020 2021 2020 Cost of services ​ $ 7,775 ​ $ 7,843 ​ $ 14 ​ $ 10 ​ Cost of sales ​ 1,585 ​ 1,624 ​ (22) ​ 9 ​ Cost of financing ​ 165 ​ 181 ​ 2 ​ 3 ​ SG&A expense ​ 5,174 ​ 5,955 ​ 34 ​ (191) ​ Other (income) and expense ​ 362 ​ 182 ​ (160) ​ (101) ​ Interest expense ​ 280 ​ 326 ​ 5 ​ 10 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gain (Loss) Recognized in Consolidated Income Statement ​ ​ Consolidated ​ Recognized on ​ Attributable to Risk (Dollars in millions) ​ Income Statement ​ Derivatives ​ Being Hedged (2) For the three months ended March 31: Line Item 2021 2020 2021 2020 Derivative instruments in fair value hedges (1): ​ ​ ​ ​ Interest rate contracts Cost of financing ​ $ (1) ​ $ 18 ​ $ 7 ​ $ (13) ​ Interest expense ​ (1) ​ 49 ​ 18 ​ (37) Derivative instruments not designated as hedging instruments: ​ ​ ​ ​ Foreign exchange contracts Other (income) and expense ​ (44) ​ (11) ​ N/A ​ N/A Equity contracts SG&A expense ​ 49 ​ (201) ​ N/A ​ N/A Total ​ $ 3 ​ $ (146) ​ $ 25 ​ $ (50) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gain (Loss) Recognized in Consolidated Income Statement and Other Comprehensive Income (Dollars in millions) ​ ​ ​ ​ ​ ​ ​ Consolidated ​ Reclassified ​ Amounts Excluded from For the three months ​ Recognized in OCI ​ Income Statement ​ from AOCI ​ Effectiveness Testing (3) ended March 31: 2021 2020 Line Item 2021 2020 2021 2020 Derivative instruments in cash flow hedges: ​ ​ ​ ​ ​ ​ ​ ​ Interest rate contracts ​ $ — ​ $ — Cost of financing ​ $ (1) ​ $ (1) ​ $ — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ Interest expense ​ (3) ​ (3) ​ — ​ — ​ Foreign exchange contracts ​ 187 ​ (180) Cost of services ​ 14 ​ 10 ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ Cost of sales ​ (22) ​ 9 ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ Cost of financing ​ (5) ​ (7) ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ SG&A expense ​ (15) ​ 10 ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ Other (income) and expense ​ (116) ​ (89) ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ Interest expense ​ (13) ​ (18) ​ ​ — ​ ​ — ​ Instruments in net investment hedges (4): ​ ​ ​ ​ ​ ​ ​ Foreign exchange contracts ​ 907 ​ 485 Cost of financing ​ — ​ — ​ 2 ​ 7 ​ ​ ​ ​ ​ ​ Interest expense ​ — ​ — ​ 4 ​ 20 ​ Total ​ $ 1,094 ​ $ 304 ​ $ (160) ​ $ (91) ​ $ 6 ​ $ 27 ​ (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)	3 Months Ended
	Mar. 31, 2021
Stock-Based Compensation
Stock-based compensation cost included in income from continuing operations	​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) ​ ​ For the three months ended March 31: ​ 2021 ​ 2020 Cost ​ $ 41 ​ $ 27 Selling, general and administrative ​ 123 ​ 117 Research, development and engineering ​ 49 ​ 45 Pre-tax stock-based compensation cost ​ $ 213 ​ $ 189 Income tax benefits ​ (52) ​ (45) Total net stock-based compensation cost ​ $ 161 ​ $ 144

Retirement-Related Benefits (Ta

Retirement-Related Benefits (Tables)	3 Months Ended
	Mar. 31, 2021
Retirement-Related Benefits
Pre-tax cost for all retirement-related plans	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Yr. to Yr. (Dollars in millions) ​ ​ ​ ​ ​ ​ ​ Percent For the three months ended March 31: ​ 2021 ​ 2020 ​ Change Retirement-related plans — cost: ​ ​ ​ Defined benefit and contribution pension plans — cost ​ $ 672 ​ $ 584 15.2 % Nonpension postretirement plans — cost ​ 44 ​ 52 (14.5) ​ Total ​ $ 717 ​ $ 636 12.8 %
Components of net periodic (income)/cost of the company's retirement-related benefit plans	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) ​ U.S. Plan ​ Non-U.S. Plans For the three months ended March 31: 2021 2020 2021 2020 Service cost ​ $ — ​ $ — ​ $ 92 ​ $ 95 Interest cost (1) ​ 277 ​ 375 ​ 111 ​ 129 Expected return on plan assets (1) ​ (451) ​ (542) ​ (291) ​ (309) Amortization of prior service costs/(credits) (1) ​ 4 ​ 4 ​ (2) ​ (5) Recognized actuarial losses (1) ​ 249 ​ 207 ​ 375 ​ 342 Curtailments and settlements (1) ​ — ​ — ​ 17 ​ 8 Multi-employer plans ​ — ​ — ​ 8 ​ 7 Other costs/(credits) (1) ​ — ​ — ​ 11 ​ 5 Total net periodic pension (income)/cost of defined benefit plans ​ $ 80 ​ $ 44 ​ $ 322 ​ $ 274 Cost of defined contribution plans ​ 151 ​ 155 ​ 119 ​ 110 Total defined benefit and contribution pension plans cost recognized in the Consolidated Income Statement ​ $ 231 ​ $ 199 ​ $ 441 ​ $ 385 (1) These components of net periodic pension cost are included in other (income) and expense in the Consolidated Income Statement. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) ​ U.S. Plan ​ Non-U.S. Plans For the three months ended March 31: 2021 2020 2021 2020 Service cost ​ $ 2 ​ $ 2 ​ $ 1 ​ $ 1 Interest cost (1) ​ 16 ​ 26 ​ 8 ​ 10 Expected return on plan assets (1) ​ — ​ — ​ (1) ​ (1) Amortization of prior service costs/(credits) (1) ​ 1 ​ 1 ​ 0 ​ 0 Recognized actuarial losses (1) ​ 13 ​ 7 ​ 4 ​ 6 Curtailments and settlements (1) ​ — ​ — ​ — ​ 0 Total nonpension postretirement plans cost recognized in the Consolidated Income Statement ​ $ 32 ​ $ 36 ​ $ 12 ​ $ 16 (1) These components of net periodic pension cost are included in other (income) and expense in the Consolidated Income Statement.
Schedule of contributions	​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) ​ Plan Contributions For the three months ended March 31: 2021 2020 U.S. nonpension postretirement benefit plan ​ $ 106 ​ $ 136 Non-U.S. DB and multi-employer plans ​ 66 ​ 82 Total plan contributions ​ $ 172 ​ $ 217

Basis of Presentation (Details)

Basis of Presentation (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Provision for/(benefit from) income taxes	$ (51)	$ (1,226)
Other (income) and expense
Noncontrolling interest amounts, net of tax	$ 7.6	$ 4.5

Accounting Changes - Credit Los

Accounting Changes - Credit Losses (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Accounting Changes
Deferred tax assets	$ 8,953	$ 9,241
Retained earnings	$ 162,218	$ 162,717
Accounting Standards Update 2016-13 | Cumulative Effect, Period of Adoption, Adjustment
Accounting Changes
Allowance for credit losses			$ 81
Deferred tax assets			(14)
Retained earnings			$ (66)

Revenue Recognition - Disaggreg

Revenue Recognition - Disaggregation of Revenue by Major Products/Service Offerings (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Revenue by Major Products/Service Offerings
Total Revenue	$ 17,730	$ 17,571
External Revenue
Revenue by Major Products/Service Offerings
Total Revenue	17,707	17,508
Other
Revenue by Major Products/Service Offerings
Revenue	23	62
Cloud & Cognitive Software | External Revenue
Revenue by Major Products/Service Offerings
Revenue	5,437	5,238
Total Revenue	5,437	5,238
Global Business Services | External Revenue
Revenue by Major Products/Service Offerings
Revenue	4,234	4,136
Total Revenue	4,234	4,136
Global Technology Services | External Revenue
Revenue by Major Products/Service Offerings
Revenue	6,370	6,467
Total Revenue	6,370	6,467
Systems | External Revenue
Revenue by Major Products/Service Offerings
Revenue	1,427	1,368
Total Revenue	1,427	1,368
Global Financing | External Revenue
Revenue by Major Products/Service Offerings
Financial Services Revenue	240	299
Total Revenue	240	299
Cloud & Data Platforms | Cloud & Cognitive Software | External Revenue
Revenue by Major Products/Service Offerings
Revenue	2,866	2,536
Cognitive Applications | Cloud & Cognitive Software | External Revenue
Revenue by Major Products/Service Offerings
Revenue	1,233	1,182
Transaction Processing Platforms | Cloud & Cognitive Software | External Revenue
Revenue by Major Products/Service Offerings
Revenue	1,338	1,520
Consulting | Global Business Services | External Revenue
Revenue by Major Products/Service Offerings
Revenue	2,189	2,071
Application Management | Global Business Services | External Revenue
Revenue by Major Products/Service Offerings
Revenue	1,770	1,840
Global Process Services | Global Business Services | External Revenue
Revenue by Major Products/Service Offerings
Revenue	274	225
Infrastructure & Cloud Services | Global Technology Services | External Revenue
Revenue by Major Products/Service Offerings
Revenue	4,853	4,916
Technology Support Services | Global Technology Services | External Revenue
Revenue by Major Products/Service Offerings
Revenue	1,517	1,550
Systems Hardware | Systems | External Revenue
Revenue by Major Products/Service Offerings
Revenue	1,114	997
Operating Systems Software | Systems | External Revenue
Revenue by Major Products/Service Offerings
Revenue	$ 313	$ 371

Revenue Recognition - Disaggr_2

Revenue Recognition - Disaggregation of Revenue by Geography (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Revenue by Geography
Revenues	$ 17,730	$ 17,571
Americas
Revenue by Geography
Revenues	8,179	8,166
EMEA
Revenue by Geography
Revenues	5,641	5,517
Asia Pacific
Revenue by Geography
Revenues	$ 3,909	$ 3,888

Revenue Recognition - Remaining

Revenue Recognition - Remaining Performance Obligations (Details) - USD ($) $ in Billions	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Revenue Recognition
Practical expedient, remaining performance obligations	true	true
Remaining performance obligations related to customer contracts that are unsatisfied or partially unsatisfied	$ 114

Revenue Recognition - Remaini_2

Revenue Recognition - Remaining Performance Obligations, Expected Timing of Satisfaction (Details)	Mar. 31, 2021
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01
Remaining Performance Obligations
Percentage of remaining performance obligation expected to be recognized	60.00%
Duration of expected recognition period for remaining performance obligation	2 years
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01
Remaining Performance Obligations
Percentage of remaining performance obligation expected to be recognized	30.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | Minimum
Remaining Performance Obligations
Duration of expected recognition period for remaining performance obligation	3 years
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | Maximum
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	3 Months Ended
	Mar. 31, 2021USD ($)
Revenue Recognition
Impact to revenue from performance obligations satisfied (or partially satisfied) in previous periods	$ (45)

Revenue Recognition - Reconcili

Revenue Recognition - Reconciliation of Contract Balances (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Reconciliation of Contract Balances
Notes and accounts receivable-trade (net of allowances of $345 in 2021 and $351 in 2020)	$ 6,458	$ 7,132
Notes and accounts receivable - trade, allowances	345	351
Contract assets	522	497
Deferred income (current)	14,197	12,833
Deferred income (noncurrent)	4,153	$ 4,301
Revenue recognized that was included in deferred income at the beginning of the period	$ 4,200

Revenue Recognition - Trade All

Revenue Recognition - Trade Allowance for Credit Losses (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Roll forward of notes and accounts receivable - trade allowance for credit losses
Allowance for Credit Loss, Beginning Balance	$ 351	$ 316
Additions / (Releases)	1	76
Write-offs	(6)	(46)
Other	(2)	5
Allowance for Credit Loss, Ending Balance	$ 345	$ 351

Segments - Results of Continuin

Segments - Results of Continuing Operations (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Segment Information
Revenue	$ 17,730	$ 17,571
Pre-tax income/(loss) from continuing operations	905	(49)
External Revenue
Segment Information
Revenue	17,707	17,508
External Revenue | Cloud & Cognitive Software
Segment Information
Revenue	5,437	5,238
External Revenue | Global Business Services
Segment Information
Revenue	4,234	4,136
External Revenue | Global Technology Services
Segment Information
Revenue	6,370	6,467
External Revenue | Systems
Segment Information
Revenue	1,427	1,368
External Revenue | Global Financing
Segment Information
Revenue	240	299
Internal transactions
Segment Information
Revenue	(1,557)	(1,514)
Pre-tax income/(loss) from continuing operations	(73)	(55)
Internal transactions | Cloud & Cognitive Software
Segment Information
Revenue	(832)	(813)
Internal transactions | Global Business Services
Segment Information
Revenue	(55)	(46)
Internal transactions | Global Technology Services
Segment Information
Revenue	(313)	(294)
Internal transactions | Systems
Segment Information
Revenue	(189)	(148)
Internal transactions | Global Financing
Segment Information
Revenue	(168)	(212)
Business Segments
Segment Information
Revenue	19,264	19,023
Pre-tax income/(loss) from continuing operations	$ 2,122	$ 1,003
Revenue year-to-year change (as a percent)	1.30%
Pre-tax income/(loss) year-to-year change (as a percent)	111.60%
Pre-tax income/(loss) margin (as a percent)	11.00%	5.30%
Business Segments | Cloud & Cognitive Software
Segment Information
Revenue	$ 6,269	$ 6,052
Pre-tax income/(loss) from continuing operations	$ 1,428	$ 933
Revenue year-to-year change (as a percent)	3.60%
Pre-tax income/(loss) year-to-year change (as a percent)	53.00%
Pre-tax income/(loss) margin (as a percent)	22.80%	15.40%
Business Segments | Global Business Services
Segment Information
Revenue	$ 4,289	$ 4,183
Pre-tax income/(loss) from continuing operations	$ 390	$ 271
Revenue year-to-year change (as a percent)	2.50%
Pre-tax income/(loss) year-to-year change (as a percent)	44.10%
Pre-tax income/(loss) margin (as a percent)	9.10%	6.50%
Business Segments | Global Technology Services
Segment Information
Revenue	$ 6,683	$ 6,761
Pre-tax income/(loss) from continuing operations	$ 140	$ (178)
Revenue year-to-year change (as a percent)	(1.20%)
Pre-tax income/(loss) margin (as a percent)	2.10%	(2.60%)
Business Segments | Systems
Segment Information
Revenue	$ 1,616	$ 1,516
Pre-tax income/(loss) from continuing operations	$ (2)	$ (217)
Revenue year-to-year change (as a percent)	6.60%
Pre-tax income/(loss) margin (as a percent)	(0.10%)	(14.30%)
Business Segments | Global Financing
Segment Information
Revenue	$ 408	$ 511
Pre-tax income/(loss) from continuing operations	$ 166	$ 194
Revenue year-to-year change (as a percent)	(20.20%)
Pre-tax income/(loss) year-to-year change (as a percent)	(14.20%)
Pre-tax income/(loss) margin (as a percent)	40.80%	37.90%

Segments - Revenue Reconciliati

Segments - Revenue Reconciliation (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Revenue
Revenue	$ 17,730	$ 17,571
Business Segments
Revenue
Revenue	19,264	19,023
Other
Revenue
Other - divested businesses	1	18
Other revenue	21	44
Internal transactions
Revenue
Revenue	$ (1,557)	$ (1,514)

Segments - Pre-Tax Income Recon

Segments - Pre-Tax Income Reconciliation (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Pre-tax income from continuing operations
Amortization of acquired intangible assets	$ (452)	$ (473)
Acquisition-related (charges)/income	(16)	0
Non-operating retirement-related (costs)/income	(343)	(264)
Spin-off related charges	(61)
Other - divested businesses	(8)	25
Income/(loss) from continuing operations before income taxes	905	(49)
Business Segments
Pre-tax income from continuing operations
Income/(loss) from continuing operations before income taxes	2,122	1,003
Internal transactions
Pre-tax income from continuing operations
Income/(loss) from continuing operations before income taxes	(73)	(55)
Unallocated corporate amounts
Pre-tax income from continuing operations
Income/(loss) from continuing operations before income taxes	$ (263)	$ (284)

Acquisitions & Divestitures - (

Acquisitions & Divestitures - (Details) $ in Millions	3 Months Ended
	Mar. 31, 2021USD ($)item
Acquisitions
Percentage of business acquired (as a percent)	100.00%
2021 Acquisitions
Acquisitions
Number of acquisitions | item	3
Aggregate acquisitions cost | $	$ 987

Acquisitions & Divestitures - P

Acquisitions & Divestitures - Purchase Price Allocation (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Acquisitions
Goodwill	$ 59,984	$ 59,617	$ 58,222
2021 Acquisitions
Acquisitions
Current assets	72
Property, plant, and equipment/noncurrent assets	4
Goodwill	746
Total assets acquired	1,097
Current liabilities	48
Noncurrent liabilities	62
Total liabilities assumed	110
Total purchase price	$ 987
Acquired intangible asset, weighted average useful life	6 years 9 months 18 days
2021 Acquisitions | Client relationships
Acquisitions
Intangible assets	$ 134
Acquired intangible asset, weighted average useful life	7 years
2021 Acquisitions | Completed technology
Acquisitions
Intangible assets	$ 114
2021 Acquisitions | Completed technology | Minimum
Acquisitions
Acquired intangible asset, weighted average useful life	3 years
2021 Acquisitions | Completed technology | Maximum
Acquisitions
Acquired intangible asset, weighted average useful life	7 years
2021 Acquisitions | Trademarks
Acquisitions
Intangible assets	$ 27
2021 Acquisitions | Trademarks | Minimum
Acquisitions
Acquired intangible asset, weighted average useful life	2 years
2021 Acquisitions | Trademarks | Maximum
Acquisitions
Acquired intangible asset, weighted average useful life	6 years
Cloud & Cognitive Software | 2021 Acquisitions
Acquisitions
Goodwill	$ 245
Global Business Services | 2021 Acquisitions
Acquisitions
Goodwill	$ 501

Acquisitions & Divestitures - G

Acquisitions & Divestitures - Goodwill and Restricted Cash (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Acquisitions
Goodwill	$ 59,984	$ 59,617	$ 58,222
Restricted cash	142	463
2021 Acquisitions
Acquisitions
Goodwill	$ 746
Estimated percent of goodwill deductible for tax purposes	11.00%
2020 Acquisitions
Acquisitions
Restricted cash		$ 323
Global Business Services | 2021 Acquisitions
Acquisitions
Goodwill	$ 501
Cloud & Cognitive Software | 2021 Acquisitions
Acquisitions
Goodwill	$ 245

Earnings Per Share of Common _3

Earnings Per Share of Common Stock - Computation (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Weighted-average number of shares on which earnings per share calculations are based
Weighted-average shares outstanding during period (in shares)	893,630,916	887,969,345
Add - Incremental shares under stock-based compensation plans (in shares)	6,622,441	5,740,415
Add - Incremental shares associated with contingently issuable shares (in shares)	1,492,709	1,329,477
Assuming dilution (in shares)	901,746,065	895,039,238
Net income on which basic earnings per share is calculated
Income from continuing operations	$ 956	$ 1,176
Income/(loss) from discontinued operations, net of tax	(1)	(1)
Net income on which basic earnings per share is calculated	955	1,175
Net income on which diluted earnings per share is calculated
Income from continuing operations	956	1,176
Net income applicable to contingently issuable shares		(2)
Income from continuing operations on which diluted earnings per share is calculated	956	1,174
Income/(loss) from discontinued operations, net of tax, on which basic and diluted earnings per share is calculated	(1)	(1)
Net income on which diluted earnings per share is calculated	$ 955	$ 1,173
Assuming dilution
Continuing operations (in dollars per share)	$ 1.06	$ 1.31
Discontinued operations (in dollars per share)	0	0
Total (in dollars per share)	1.06	1.31
Basic
Continuing operations (in dollars per share)	1.07	1.32
Discontinued operations (in dollars per share)	0	0
Total (in dollars per share)	$ 1.07	$ 1.32

Earnings Per Share of Common _4

Earnings Per Share of Common Stock - Antidilutive Stock Options (Details) - shares	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Stock Options
Antidilutive stock options
Outstanding stock options not included in the computation of diluted earnings per share (in shares)	1,510,886	1,136,899

Financial Assets & Liabilitie_2

Financial Assets & Liabilities - Impairment (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Financial Assets & Liabilities
Impairment for credit losses	$ 0	$ 0

Financial Assets & Liabilitie_3

Financial Assets & Liabilities - Fair Value Measurements (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Financial assets and financial liabilities measured at fair value on a recurring basis:
Debt securities - current	$ 600	$ 600
Recurring
Financial assets and financial liabilities measured at fair value on a recurring basis:
Cash equivalents	6,084	8,316
Total assets	7,141	9,161
Total liabilities	332	627
Recurring | Prepaid expenses and other current assets
Financial assets and financial liabilities measured at fair value on a recurring basis:
Derivative assets	386	85
Recurring | Investments and sundry assets
Financial assets and financial liabilities measured at fair value on a recurring basis:
Derivative assets	64	151
Recurring | Other accrued expenses and liabilities
Financial assets and financial liabilities measured at fair value on a recurring basis:
Derivative liabilities	277	587
Recurring | Other liabilities
Financial assets and financial liabilities measured at fair value on a recurring basis:
Derivative liabilities	55	40
Recurring | Level 1
Financial assets and financial liabilities measured at fair value on a recurring basis:
Equity investments	1	2
Recurring | Level 1 | Money market funds
Financial assets and financial liabilities measured at fair value on a recurring basis:
Cash equivalents	141	148
Recurring | Level 2
Financial assets and financial liabilities measured at fair value on a recurring basis:
Debt securities - current	600	600
Debt securities - noncurrent	6	7
Recurring | Level 2 | Interest rate contracts
Financial assets and financial liabilities measured at fair value on a recurring basis:
Derivatives designated as hedging - Assets	20	100
Recurring | Level 2 | Foreign exchange contracts
Financial assets and financial liabilities measured at fair value on a recurring basis:
Derivatives designated as hedging - Assets	404	111
Derivatives designated as hedging - Liabilities	276	580
Derivatives not designated as hedging - Assets	13	13
Derivatives not designated as hedging - Liabilities	50	47
Recurring | Level 2 | Time deposits and certificates of deposit
Financial assets and financial liabilities measured at fair value on a recurring basis:
Cash equivalents	5,943	7,668
Recurring | Level 2 | U.S. government securities
Financial assets and financial liabilities measured at fair value on a recurring basis:
Cash equivalents		500
Recurring | Level 1 And 2 | Equity contracts
Financial assets and financial liabilities measured at fair value on a recurring basis:
Derivatives not designated as hedging - Assets	13	$ 12
Derivatives not designated as hedging - Liabilities	$ 6

Financial Assets & Liabilitie_4

Financial Assets & Liabilities - Not Measured at Fair Value (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Long-Term Debt
Long-term debt	$ 51,206	$ 54,355
Fair value of long-term debt	$ 55,962	$ 61,598

Financing Receivables - Payment

Financing Receivables - Payment Terms (Details)	3 Months Ended
	Mar. 31, 2021
Lease receivables | Minimum
Financing receivables
Financing receivable, payment terms	2 years
Lease receivables | Maximum
Financing receivables
Financing receivable, payment terms	6 years
Commercial financing receivables | Minimum
Financing receivables
Financing receivable, payment terms	30 days
Commercial financing receivables | Maximum
Financing receivables
Financing receivable, payment terms	90 days
Loan receivables | Maximum
Financing receivables
Financing receivable, payment terms	7 years

Financing Receivables - Compone

Financing Receivables - Components of Financing Receivables (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020	Dec. 24, 2020
Components of the company's financing receivables
Financing receivables, gross	$ 15,261		$ 18,580
Unearned income	(711)		(823)
Residual value	430		485
Amortized Cost	14,980		18,242
Allowance for credit losses	(236)		(263)
Total financing receivables, net	14,744		17,979
Current portion	8,822		10,892
Noncurrent portion	5,922		7,086
Financing receivables pledged as collateral for nonrecourse borrowings	425		482
Sold financing receivables	995	$ 0
Lease receivables
Components of the company's financing receivables
Financing receivables, gross	3,923		4,001
Unearned income	(290)		(335)
Residual value	430		485
Amortized Cost	4,064		4,151
Allowance for credit losses	(74)		(82)
Total financing receivables, net	3,989		4,069
Current portion	1,660		1,525
Noncurrent portion	2,329		2,544
Sold financing receivables	342
Commercial financing receivables
Components of the company's financing receivables
Financing receivables, gross	1,119		2,419
Unearned income	0		0
Amortized Cost	1,119		2,419
Allowance for credit losses	(7)		(8)
Total financing receivables, net	1,112		2,411
Current portion	1,112		2,411
Financing receivables held for sale	257		383
Loan receivables
Components of the company's financing receivables
Financing receivables, gross	10,218		12,159
Unearned income	(421)		(488)
Amortized Cost	9,797		11,671
Allowance for credit losses	(154)		(173)
Total financing receivables, net	9,643		11,498
Current portion	6,050		6,955
Noncurrent portion	3,592		$ 4,542
Sold financing receivables	653
Third Party Investor | Commercial financing receivables
Components of the company's financing receivables
Sold financing receivables	$ 1,167
Third Party Investor | Maximum | Commercial financing receivables
Components of the company's financing receivables
Financing receivables to be sold				$ 3,000

Financing Receivables - By Port

Financing Receivables - By Portfolio Segment (Details) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2021USD ($)item	Dec. 31, 2020USD ($)item
Financing receivables
Number of classes of financing receivable | item	3	3
Amortized Cost	$ 14,980	$ 18,242
Allowance for credit losses:
Allowance for credit losses, beginning balance	263
Allowance for credit losses, ending balance	236	263
Total Client Financing Receivables Portfolio Segment
Financing receivables
Amortized Cost	13,861	15,822
Allowance for credit losses:
Allowance for credit losses, beginning balance	255	252
Write-offs	(9)	(34)
Recoveries	1	3
Additions/(releases)	(12)	34
Other	(6)	1
Allowance for credit losses, ending balance	229	255
Total Client Financing Receivables Portfolio Segment | Americas
Financing receivables
Amortized Cost	6,867	7,758
Allowance for credit losses:
Allowance for credit losses, beginning balance	141	142
Write-offs	(2)	(28)
Recoveries	0	0
Additions/(releases)	(11)	33
Other	(3)	(6)
Allowance for credit losses, ending balance	125	141
Total Client Financing Receivables Portfolio Segment | EMEA
Financing receivables
Amortized Cost	4,244	5,023
Allowance for credit losses:
Allowance for credit losses, beginning balance	77	69
Write-offs	(1)	(3)
Recoveries	0	0
Additions/(releases)	2	5
Other	(3)	6
Allowance for credit losses, ending balance	76	77
Total Client Financing Receivables Portfolio Segment | Asia Pacific
Financing receivables
Amortized Cost	2,750	3,042
Allowance for credit losses:
Allowance for credit losses, beginning balance	37	41
Write-offs	(6)	(3)
Recoveries	0	2
Additions/(releases)	(3)	(4)
Other	0	1
Allowance for credit losses, ending balance	$ 27	$ 37

Financing Receivables - Past Du

Financing Receivables - Past Due (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Past Due Financing Receivable
Amortized Cost	$ 14,980	$ 18,242
Total Client Financing Receivables Portfolio Segment
Past Due Financing Receivable
Amortized Cost	13,861	15,822
Amortized Cost Not Accruing	212	223
Impaired financing receivables, related allowance	167	178
Total Client Financing Receivables Portfolio Segment | Total Past Due > 90 days
Past Due Financing Receivable
Amortized Cost > 90 Days	405	456
Amortized Cost > 90 Days and Accruing	205	241
Billed Invoices > 90 Days and Accruing	18	20
Total Client Financing Receivables Portfolio Segment | Americas
Past Due Financing Receivable
Amortized Cost	6,867	7,758
Amortized Cost Not Accruing	94	96
Total Client Financing Receivables Portfolio Segment | Americas | Total Past Due > 90 days
Past Due Financing Receivable
Amortized Cost > 90 Days	271	295
Amortized Cost > 90 Days and Accruing	182	200
Billed Invoices > 90 Days and Accruing	11	12
Total Client Financing Receivables Portfolio Segment | EMEA
Past Due Financing Receivable
Amortized Cost	4,244	5,023
Amortized Cost Not Accruing	93	95
Total Client Financing Receivables Portfolio Segment | EMEA | Total Past Due > 90 days
Past Due Financing Receivable
Amortized Cost > 90 Days	102	119
Amortized Cost > 90 Days and Accruing	14	28
Billed Invoices > 90 Days and Accruing	3	5
Total Client Financing Receivables Portfolio Segment | Asia Pacific
Past Due Financing Receivable
Amortized Cost	2,750	3,042
Amortized Cost Not Accruing	24	32
Total Client Financing Receivables Portfolio Segment | Asia Pacific | Total Past Due > 90 days
Past Due Financing Receivable
Amortized Cost > 90 Days	32	42
Amortized Cost > 90 Days and Accruing	9	12
Billed Invoices > 90 Days and Accruing	$ 4	$ 4

Financing Receivables - Credit

Financing Receivables - Credit Quality Year of Origination (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Amortized cost for each class of receivables, by credit quality indicator
Total Amortized Cost	$ 14,980	$ 18,242
Americas | Aaa - Baa3
Amortized cost for each class of receivables, by credit quality indicator
Originated in Current Fiscal Year	808	2,818
Originated in Fiscal Year before Latest Fiscal Year	1,966	988
Originated Two Years before Latest Fiscal Year	871	829
Originated Three Years before Latest Fiscal Year	666	285
Financing Receivable, Originated Four Years before Latest Fiscal Year	206	90
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	56	28
Total Amortized Cost	4,573	5,038
Americas | Ba1 - D
Amortized cost for each class of receivables, by credit quality indicator
Originated in Current Fiscal Year	421	1,449
Originated in Fiscal Year before Latest Fiscal Year	923	623
Originated Two Years before Latest Fiscal Year	457	360
Originated Three Years before Latest Fiscal Year	283	154
Financing Receivable, Originated Four Years before Latest Fiscal Year	117	52
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	92	81
Total Amortized Cost	2,294	2,720
EMEA | Aaa - Baa3
Amortized cost for each class of receivables, by credit quality indicator
Originated in Current Fiscal Year	310	1,513
Originated in Fiscal Year before Latest Fiscal Year	1,086	668
Originated Two Years before Latest Fiscal Year	471	329
Originated Three Years before Latest Fiscal Year	311	70
Financing Receivable, Originated Four Years before Latest Fiscal Year	43	33
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	34	22
Total Amortized Cost	2,254	2,635
EMEA | Ba1 - D
Amortized cost for each class of receivables, by credit quality indicator
Originated in Current Fiscal Year	349	1,427
Originated in Fiscal Year before Latest Fiscal Year	887	519
Originated Two Years before Latest Fiscal Year	431	245
Originated Three Years before Latest Fiscal Year	166	128
Financing Receivable, Originated Four Years before Latest Fiscal Year	103	46
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	53	22
Total Amortized Cost	1,989	2,387
Asia Pacific | Aaa - Baa3
Amortized cost for each class of receivables, by credit quality indicator
Originated in Current Fiscal Year	253	958
Originated in Fiscal Year before Latest Fiscal Year	721	564
Originated Two Years before Latest Fiscal Year	499	419
Originated Three Years before Latest Fiscal Year	365	205
Financing Receivable, Originated Four Years before Latest Fiscal Year	165	114
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	109	38
Total Amortized Cost	2,111	2,298
Asia Pacific | Ba1 - D
Amortized cost for each class of receivables, by credit quality indicator
Originated in Current Fiscal Year	105	351
Originated in Fiscal Year before Latest Fiscal Year	230	123
Originated Two Years before Latest Fiscal Year	94	167
Originated Three Years before Latest Fiscal Year	133	52
Financing Receivable, Originated Four Years before Latest Fiscal Year	40	33
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	36	18
Total Amortized Cost	$ 639	$ 743

Leases - Lease Amounts Included

Leases - Lease Amounts Included in Consolidated Income Statement (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Lease income - sales-type and direct financing leases
Sales-type lease selling price	$ 363	$ 211
Less: Carrying value of underlying assets	59	76
Gross profit	304	135
Interest income on lease receivables	51	74
Total sales-type and direct financing lease income	355	208
Lease income - operating leases	51	71
Variable lease income	57	30
Total lease income	$ 463	$ 310

Intangible Assets Including G_3

Intangible Assets Including Goodwill - Intangible Assets by Class (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Intangible asset balances by major asset class
Gross Carrying Amount	$ 18,952	$ 18,874
Accumulated Amortization	(5,417)	(5,079)
Net Carrying Amount	13,535	13,796
Amount of foreign currency translation increase (decrease)	(137)	279
Capitalized software
Intangible asset balances by major asset class
Gross Carrying Amount	1,854	1,777
Accumulated Amortization	(837)	(814)
Net Carrying Amount	1,017	963
Client relationships
Intangible asset balances by major asset class
Gross Carrying Amount	8,874	8,838
Accumulated Amortization	(2,275)	(2,056)
Net Carrying Amount	6,599	6,783
Completed technology
Intangible asset balances by major asset class
Gross Carrying Amount	5,972	5,957
Accumulated Amortization	(1,784)	(1,671)
Net Carrying Amount	4,188	4,286
Patents/trademarks
Intangible asset balances by major asset class
Gross Carrying Amount	2,196	2,246
Accumulated Amortization	(480)	(499)
Net Carrying Amount	1,717	1,747
Other intangible assets
Intangible asset balances by major asset class
Gross Carrying Amount	56	56
Accumulated Amortization	(41)	(39)
Net Carrying Amount	$ 14	$ 16

Intangible Assets Including G_4

Intangible Assets Including Goodwill - Intangible Assets Activity (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Intangible assets
Intangible assets, increase (decrease)	$ (261)
Intangible asset amortization expense	620	$ 622
Retirement of fully amortized intangible assets	$ 256

Intangible Assets Including G_5

Intangible Assets Including Goodwill - Future Amortization (Details) $ in Millions	Mar. 31, 2021USD ($)
Future amortization expense, by year
Remainder of 2021	$ 1,848
2022	2,142
2023	1,627
2024	1,420
2025	1,389
Thereafter	5,109
Capitalized software
Future amortization expense, by year
Remainder of 2021	469
2022	368
2023	168
2024	12
Acquired intangibles
Future amortization expense, by year
Remainder of 2021	1,379
2022	1,774
2023	1,459
2024	1,408
2025	1,389
Thereafter	$ 5,109

Intangible Assets Including G_6

Intangible Assets Including Goodwill - Goodwill by Segment (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Changes in Goodwill Balances
Beginning Balance	$ 59,617	$ 58,222
Goodwill Additions	746	575
Purchase Price Adjustments	6	(139)
Foreign Currency Translation and Other Adjustments	(384)	960
Ending Balance	59,984	59,617
Goodwill impairment losses	0	0
Goodwill accumulated impairment losses	0
Business Segments | Cloud & Cognitive Software
Changes in Goodwill Balances
Beginning Balance	43,934	43,037
Goodwill Additions	245	362
Purchase Price Adjustments	6	(139)
Foreign Currency Translation and Other Adjustments	(249)	675
Ending Balance	43,935	43,934
Business Segments | Global Business Services
Changes in Goodwill Balances
Beginning Balance	6,145	5,775
Goodwill Additions	501	205
Purchase Price Adjustments	0
Foreign Currency Translation and Other Adjustments	(61)	165
Ending Balance	6,585	6,145
Business Segments | Global Technology Services
Changes in Goodwill Balances
Beginning Balance	7,245	7,141
Foreign Currency Translation and Other Adjustments	(70)	104
Ending Balance	7,175	7,245
Business Segments | Systems
Changes in Goodwill Balances
Beginning Balance	2,293	2,270
Goodwill Additions		8
Purchase Price Adjustments	0
Foreign Currency Translation and Other Adjustments	(4)	15
Ending Balance	$ 2,289	$ 2,293

Borrowings - Short-Term Debt (D

Borrowings - Short-Term Debt (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Short-term debt disclosures
Short-term loans	$ 36	$ 130
Long-term debt - current maturities	5,162	7,053
Short-term Debt, Total	$ 5,198	$ 7,183
Short-term loans
Short-term debt disclosures
Weighted-average interest rates for short-term debt (as a percent)	5.30%	5.70%

Borrowings - Long-Term Debt, Co

Borrowings - Long-Term Debt, Components (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Borrowings
Long-term debt excluding finance lease obligations	$ 56,708	$ 61,718
Finance lease obligations	317	296
Long-term debt, gross	57,025	62,013
Less: net unamortized discount	868	875
Less: net unamortized debt issuance cost	147	156
Add: fair value adjustment	357	426
Total	56,367	61,408
Less: current maturities	5,162	7,053
Total long-term debt (excluding current portion)	$ 51,206	54,355
Finance lease obligations, interest rate	1.50%
U.S. dollars
Borrowings
Long-term debt, gross	$ 37,062	41,218
Euros
Borrowings
Long-term debt, gross	$ 17,618	18,355
Debt instrument, weighted-average interest rate (as a percent)	1.10%
Pound sterling
Borrowings
Long-term debt, gross	$ 414	411
Debt instrument, weighted-average interest rate (as a percent)	2.60%
Japanese yen
Borrowings
Long-term debt, gross	$ 1,316	1,409
Debt instrument, weighted-average interest rate (as a percent)	0.30%
Other
Borrowings
Long-term debt, gross	$ 299	324
Debt instrument, weighted-average interest rate (as a percent)	4.40%
Maturing 2021 | U.S. dollars
Borrowings
Long-term debt, gross	$ 2,635	5,499
Debt instrument, weighted-average interest rate (as a percent)	0.70%
Maturing 2022 | U.S. dollars
Borrowings
Long-term debt, gross	$ 5,712	6,233
Debt instrument, weighted-average interest rate (as a percent)	2.60%
Maturing 2023 | U.S. dollars
Borrowings
Long-term debt, gross	$ 1,636	2,395
Debt instrument, weighted-average interest rate (as a percent)	3.50%
Maturing 2024 | U.S. dollars
Borrowings
Long-term debt, gross	$ 5,025	5,029
Debt instrument, weighted-average interest rate (as a percent)	3.30%
Maturing 2025 | U.S. dollars
Borrowings
Long-term debt, gross	$ 626	631
Debt instrument, weighted-average interest rate (as a percent)	6.80%
Maturing 2026 | U.S. dollars
Borrowings
Long-term debt, gross	$ 4,368	4,370
Debt instrument, weighted-average interest rate (as a percent)	3.30%
Maturing 2027 | U.S. dollars
Borrowings
Long-term debt, gross	$ 2,219	2,219
Debt instrument, weighted-average interest rate (as a percent)	3.00%
Maturing 2028 | U.S. dollars
Borrowings
Long-term debt, gross	$ 313	313
Debt instrument, weighted-average interest rate (as a percent)	6.50%
Maturing 2029 | U.S. dollars
Borrowings
Long-term debt, gross	$ 3,250	3,250
Debt instrument, weighted-average interest rate (as a percent)	3.50%
Maturing 2030 | U.S. dollars
Borrowings
Long-term debt, gross	$ 1,350	1,350
Debt instrument, weighted-average interest rate (as a percent)	2.00%
Maturing 2032 | U.S. dollars
Borrowings
Long-term debt, gross	$ 600	600
Debt instrument, weighted-average interest rate (as a percent)	5.90%
Maturing 2038 | U.S. dollars
Borrowings
Long-term debt, gross	$ 83	83
Debt instrument, weighted-average interest rate (as a percent)	8.00%
Maturing 2039 | U.S. dollars
Borrowings
Long-term debt, gross	$ 2,745	2,745
Debt instrument, weighted-average interest rate (as a percent)	4.50%
Maturing 2040 | U.S. dollars
Borrowings
Long-term debt, gross	$ 650	650
Debt instrument, weighted-average interest rate (as a percent)	2.90%
Maturing 2042 | U.S. dollars
Borrowings
Long-term debt, gross	$ 1,107	1,107
Debt instrument, weighted-average interest rate (as a percent)	4.00%
Maturing 2045 | U.S. dollars
Borrowings
Long-term debt, gross	$ 27	27
Debt instrument, weighted-average interest rate (as a percent)	7.00%
Maturing 2046 | U.S. dollars
Borrowings
Long-term debt, gross	$ 650	650
Debt instrument, weighted-average interest rate (as a percent)	4.70%
Maturing 2049 | U.S. dollars
Borrowings
Long-term debt, gross	$ 3,000	3,000
Debt instrument, weighted-average interest rate (as a percent)	4.30%
Maturing 2050 | U.S. dollars
Borrowings
Long-term debt, gross	$ 750	750
Debt instrument, weighted-average interest rate (as a percent)	3.00%
Maturing 2096 | U.S. dollars
Borrowings
Long-term debt, gross	$ 316	$ 316
Debt instrument, weighted-average interest rate (as a percent)	7.10%

Borrowings - Long-Term Debt, _2

Borrowings - Long-Term Debt, Covenants (Details) $ in Millions	3 Months Ended
	Mar. 31, 2021USD ($)
Borrowings
Limit based on net tangible assets	10.00%
Credit Facilities
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) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Euro fixed-rate notes
Notes Issued
Aggregate amount of debt issued		$ 4,100
Fixed rate debt due in 2021
Notes Issued
Outstanding debt redeemed		$ 2,900
Aggregate principal redeemed (as a percent)		100.00%
Loss upon redemption on notes		$ (49)
IBM Credit LLC | Fixed rate debt due in 2021 to 2023
Notes Issued
Outstanding debt redeemed	$ 1,750
Aggregate principal redeemed (as a percent)	100.00%
Loss upon redemption on notes	$ (22)

Borrowings - Pre-Swap Obligatio

Borrowings - Pre-Swap Obligations (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Pre-swap annual contractual obligations of long-term debt outstanding
Remainder of 2021	$ 4,060
2022	6,826
2023	4,928
2024	6,442
2025	4,144
Thereafter	30,625
Total	$ 57,025	$ 62,013

Borrowings - Interest on Debt (

Borrowings - Interest on Debt (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Interest on Debt
Interest capitalized	$ 2	$ 5
Total interest paid and accrued	388	449
Cost of financing
Interest on Debt
Interest paid	106	119
Interest expense
Interest on Debt
Interest paid	$ 280	$ 326

Borrowings - Lines of Credit (D

Borrowings - Lines of Credit (Details) $ in Millions	3 Months Ended
	Mar. 31, 2021USD ($)
Five-Year Credit Agreement
Lines of Credit
Amount of credit facility	$ 10,250
Credit facility term	5 years
364-Day Credit Agreement
Lines of Credit
Amount of credit facility	$ 2,500
Credit facility term	364 days
Three-Year Credit Agreement
Lines of Credit
Amount of credit facility	$ 2,500
Credit facility term	3 years
Credit Facilities
Lines of Credit
Borrowings outstanding	$ 0

Commitments - Extensions of Cre

Commitments - Extensions of Credit (Details) - USD ($) $ in Billions	Mar. 31, 2021	Dec. 31, 2020
Extended lines of credit
Commitments, guarantees:
Unused amounts in lines of credit to third-party entities and commitments for future financing to clients	$ 1.6	$ 2.1
Financing for client purchase agreements
Commitments, guarantees:
Unused amounts in lines of credit to third-party entities and commitments for future financing to clients	$ 4.7	$ 5.2

Commitments - Standard Warranty

Commitments - Standard Warranty Liability (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Movement in standard warranty liability
Beginning Balance	$ 83	$ 113
Current period accruals	16	20
Accrual adjustments to reflect experience	(4)	(6)
Charges incurred	(23)	(26)
Ending Balance	$ 72	$ 100

Commitments - Extended Warranty

Commitments - Extended Warranty Liability (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Movement in deferred income
Amortization of deferred revenue	$ (4,200)
Current portion	14,197		$ 12,833
Noncurrent portion	4,153		$ 4,301
Extended Warranty
Movement in deferred income
Beginning Balance	425	$ 477
Revenue deferred for new extended warranty contracts	18	40
Amortization of deferred revenue	(53)	(57)
Other	(6)	(13)
Ending Balance	383	447
Current portion	199	219
Noncurrent portion	$ 185	$ 228

Contingencies (Details)

Contingencies (Details) $ in Millions	1 Months Ended		3 Months Ended
	Feb. 28, 2021USD ($)	May 31, 2015defendant	Mar. 31, 2021USD ($)country	Oct. 30, 2017claim
Brazil Tax Matters
Loss Contingencies
Damages sought, value			$ 700
SCO v. IBM
Loss Contingencies
Number of remaining claims | claim				1
Litigation Case In United States District Court regarding divesting Microelectronics business, alleging violations of the Employee Retirement Income Security Act
Loss Contingencies
Number of officers or executives named as defendants | defendant		3
CISGIL v. IBM UK
Loss Contingencies
Amount of award against IBM	$ 20
Minimum
Loss Contingencies
Clients' presence in number of countries | country			175

Equity Activity - Reclassificat

Equity Activity - Reclassifications and Taxes (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Cost	$ 9,525	$ 9,649
SG&A expense	5,174	5,955
Other (income) and expense	362	182
Interest expense	280	326
Provision for/(benefit from) income taxes	(51)	(1,226)
Net (income) loss	(955)	(1,175)
Other comprehensive income/(loss)	1,080	(686)
Services
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Cost	7,775	7,843
Sales
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Cost	1,585	1,624
Financing
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Cost	165	181
Accumulated Other Comprehensive Income/(Loss)
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Unrealized gains/(losses) arising during the period, Net of Tax Amount	475	(1,174)
Reclassification/amortization, Net of Tax Amount	606	488
Other comprehensive income/(loss), Before Tax Amount	1,586	(427)
Other comprehensive income/(loss), Tax (Expense)/Benefit	(505)	(260)
Other comprehensive income/(loss)	1,080	(686)
Foreign Currency Translation Adjustments
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Unrealized gains/(losses) arising during the period, Net of Tax Amount	321	(1,041)
Other comprehensive income/(loss), Before Tax Amount	549	(919)
Other comprehensive income/(loss), Tax (Expense)/Benefit	(228)	(122)
Other comprehensive income/(loss)	321	(1,041)
Net Unrealized Gains/(Losses) on Available-For-Sale Securities
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Unrealized gains/(losses) arising during the period, Before Tax Amount	0	0
Unrealized gains/(losses) arising during the period, Tax (Expense)/Benefit	0	0
Unrealized gains/(losses) arising during the period, Net of Tax Amount	0	0
Other comprehensive income/(loss), Before Tax Amount	0	0
Other comprehensive income/(loss), Tax (Expense)/Benefit	0	0
Other comprehensive income/(loss)	0	0
Net Unrealized Gains/(Losses) on Cash Flow Hedges
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Unrealized gains/(losses) arising during the period, Before Tax Amount	187	(180)
Unrealized gains/(losses) arising during the period, Tax (Expense)/Benefit	(47)	45
Unrealized gains/(losses) arising during the period, Net of Tax Amount	140	(135)
Reclassification/amortization, Net of Tax Amount	119	68
Other comprehensive income/(loss), Before Tax Amount	347	(90)
Other comprehensive income/(loss), Tax (Expense)/Benefit	(88)	23
Other comprehensive income/(loss)	259	(67)
Net Unrealized Gains/(Losses) on Cash Flow Hedges | Reclassifications
Reclassifications and Taxes Related to Items of Other Comprehensive Income
SG&A expense	15	(10)
Other (income) and expense	116	89
Interest expense	16	22
Net Unrealized Gains/(Losses) on Cash Flow Hedges | Reclassifications | Services
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Cost	(14)	(10)
Net Unrealized Gains/(Losses) on Cash Flow Hedges | Reclassifications | Sales
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Cost	22	(9)
Net Unrealized Gains/(Losses) on Cash Flow Hedges | Reclassifications | Financing
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Cost	6	8
Net Unrealized Gains/(Losses) on Cash Flow Hedges | Reclassifications | Cost of services
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Provision for/(benefit from) income taxes	3	2
Net (income) loss	(10)	(7)
Net Unrealized Gains/(Losses) on Cash Flow Hedges | Reclassifications | Cost of sales
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Provision for/(benefit from) income taxes	(6)	2
Net (income) loss	16	(6)
Net Unrealized Gains/(Losses) on Cash Flow Hedges | Reclassifications | Cost of financing
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Provision for/(benefit from) income taxes	(2)	(2)
Net (income) loss	4	6
Net Unrealized Gains/(Losses) on Cash Flow Hedges | Reclassifications | SG&A expense
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Provision for/(benefit from) income taxes	(4)	2
Net (income) loss	11	(7)
Net Unrealized Gains/(Losses) on Cash Flow Hedges | Reclassifications | Other (income) and expense
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Provision for/(benefit from) income taxes	(29)	(22)
Net (income) loss	87	67
Net Unrealized Gains/(Losses) on Cash Flow Hedges | Reclassifications | Interest expense
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Provision for/(benefit from) income taxes	(4)	(5)
Net (income) loss	12	16
Net Change Retirement-Related Benefit Plans
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Unrealized gains/(losses) arising during the period, Net of Tax Amount	14	3
Reclassification/amortization, Net of Tax Amount	486	419
Other comprehensive income/(loss), Before Tax Amount	689	582
Other comprehensive income/(loss), Tax (Expense)/Benefit	(189)	(160)
Other comprehensive income/(loss)	500	422
Retirement-Related Benefit Plans, Prior Service Costs/(Credits)
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Unrealized gains/(losses) arising during the period, Before Tax Amount	0	(4)
Unrealized gains/(losses) arising during the period, Tax (Expense)/Benefit	0	1
Unrealized gains/(losses) arising during the period, Net of Tax Amount	0	(3)
Reclassification/amortization, Before Tax Amount	3	1
Reclassification/amortization, Tax (Expense)/Benefit	0	1
Reclassification/amortization, Net of Tax Amount	3	1
Retirement-Related Benefit Plans, Net Gains/(Losses)
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Unrealized gains/(losses) arising during the period, Before Tax Amount	20	8
Unrealized gains/(losses) arising during the period, Tax (Expense)/Benefit	(6)	(2)
Unrealized gains/(losses) arising during the period, Net of Tax Amount	14	6
Reclassification/amortization, Before Tax Amount	648	570
Reclassification/amortization, Tax (Expense)/Benefit	(177)	(157)
Reclassification/amortization, Net of Tax Amount	471	412
Retirement-Related Benefit Plans, Curtailments and Settlements
Reclassifications and Taxes Related to Items of Other Comprehensive Income
Unrealized gains/(losses) arising during the period, Before Tax Amount	17	8
Unrealized gains/(losses) arising during the period, Tax (Expense)/Benefit	(5)	(3)
Unrealized gains/(losses) arising during the period, Net of Tax Amount	$ 12	$ 6

Equity Activity - AOCI Rollforw

Equity Activity - AOCI Rollforward (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Accumulated Other Comprehensive Income (Loss) (net of tax)
Balance at the Beginning of the Period	$ 20,727	$ 20,985
Other comprehensive income/(loss)	1,080	(686)
Balance at the End of the Period	21,513	20,128
Accumulated Other Comprehensive Income/(Loss)
Accumulated Other Comprehensive Income (Loss) (net of tax)
Balance at the Beginning of the Period	(29,337)	(28,597)
Other comprehensive income before reclassifications	475	(1,174)
Amount reclassified from accumulated other comprehensive income	606	488
Other comprehensive income/(loss)	1,080	(686)
Balance at the End of the Period	(28,257)	(29,283)
Net Unrealized Gains/(Losses) on Cash Flow Hedges
Accumulated Other Comprehensive Income (Loss) (net of tax)
Balance at the Beginning of the Period	(456)	(179)
Other comprehensive income before reclassifications	140	(135)
Amount reclassified from accumulated other comprehensive income	119	68
Other comprehensive income/(loss)	259	(67)
Balance at the End of the Period	(197)	(246)
Foreign Currency Translation Adjustments
Accumulated Other Comprehensive Income (Loss) (net of tax)
Balance at the Beginning of the Period	(4,665)	(3,700)
Other comprehensive income before reclassifications	321	(1,041)
Other comprehensive income/(loss)	321	(1,041)
Balance at the End of the Period	(4,343)	(4,741)
Net Change Retirement-Related Benefit Plans
Accumulated Other Comprehensive Income (Loss) (net of tax)
Balance at the Beginning of the Period	(24,216)	(24,718)
Other comprehensive income before reclassifications	14	3
Amount reclassified from accumulated other comprehensive income	486	419
Other comprehensive income/(loss)	500	422
Balance at the End of the Period	(23,716)	(24,296)
Net Unrealized Gains/(Losses) on Available-For-Sale Securities
Accumulated Other Comprehensive Income (Loss) (net of tax)
Balance at the Beginning of the Period	0	0
Other comprehensive income before reclassifications	0	0
Other comprehensive income/(loss)	0	0
Balance at the End of the Period	$ (1)	$ 0

Derivative Financial Instrume_3

Derivative Financial Instruments - Offsetting (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Derivative Financial Instruments
Potential reduction in net position of total derivative assets	$ 181	$ 213
Potential reduction in net position of total derivative liabilities	181	213
Cash collateral rehypothecated	0	0
Other receivables
Derivative Financial Instruments
Right to reclaim cash collateral	0	0
Obligation to return cash collateral	$ 0	$ 0

Derivative Financial Instrume_4

Derivative Financial Instruments - Hedging Programs (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Instruments in net investment hedges
Derivative Financial Instruments
Notional amount	$ 8,200	$ 7,200
Average remaining maturity	2 months 12 days	3 months 18 days
Interest rate swaps | Derivative instruments in fair value hedges
Derivative Financial Instruments
Notional amount	$ 400	$ 3,000
Amount of terminated derivative	$ 1,250
Average remaining maturity	2 years	1 year 2 months 12 days
Interest rate swaps | Derivative instruments in cash flow hedges
Derivative Financial Instruments
Notional amount	$ 0	$ 0
Foreign exchange contracts | Not designated as hedging instruments - economic hedges
Derivative Financial Instruments
Notional amount	$ 6,100	6,800
Foreign exchange contracts | Not designated as hedging instruments - economic hedges | Maximum
Derivative Financial Instruments
Term of contract	1 year
Foreign exchange contracts | Instruments in net investment hedges
Derivative Financial Instruments
Notional amount	$ 15,700	16,400
Foreign exchange forward contracts | Derivative instruments in cash flow hedges
Derivative Financial Instruments
Maximum length of time hedged	3 years
Notional amount	$ 7,700	$ 8,000
Average remaining maturity	8 months 12 days	8 months 12 days
Net gains (losses) before taxes in other comprehensive income/(loss), cash flow hedges	$ 115	$ (192)
Gains (losses) expected to be reclassified to net income within the next 12 months	$ 30
Cross-currency swaps | Derivative instruments in cash flow hedges
Derivative Financial Instruments
Maximum length of time hedged	7 years
Notional amount	$ 1,500	1,500
Net gains (losses) before taxes in other comprehensive income/(loss), cash flow hedges	(199)	$ (236)
Gains (losses) expected to be reclassified to net income within the next 12 months	$ (24)
Forward-starting interest rate swaps | Derivative instruments in cash flow hedges
Derivative Financial Instruments
Number of derivative instruments outstanding	0	0
Net gains (losses) before taxes in other comprehensive income/(loss), cash flow hedges	$ (170)	$ (174)
Gains (losses) expected to be reclassified to net income within the next 12 months	(18)
Equity contracts hedging employee compensation obligations | Not designated as hedging instruments - economic hedges
Derivative Financial Instruments
Notional amount	$ 1,300	$ 1,300

Derivative Financial Instrume_5

Derivative Financial Instruments - Cumulative Basis Adjustments for Fair Value Hedges (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
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		$ (1,302)
Cumulative hedging adjustments included in the carrying amount-assets/(liabilities)		(2)
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	$ (781)	(2,097)
Cumulative hedging adjustments included in the carrying amount-assets/(liabilities)	(357)	(424)
Hedging adjustments on discontinued hedging relationships	$ (340)	$ (353)

Derivative Financial Instrume_6

Derivative Financial Instruments - Effect of Hedge Activity on Income and Expense (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Derivative Instruments, Gain (Loss)
Cost	$ 9,525	$ 9,649
SG&A expense	5,174	5,955
Other (income) and expense	362	182
Interest expense	280	326
Cost of services
Derivative Instruments, Gain (Loss)
Gains/(losses) of total hedge activity	14	10
Cost of sales
Derivative Instruments, Gain (Loss)
Gains/(losses) of total hedge activity	(22)	9
Cost of financing
Derivative Instruments, Gain (Loss)
Gains/(losses) of total hedge activity	2	3
SG&A expense
Derivative Instruments, Gain (Loss)
Gains/(losses) of total hedge activity	34	(191)
Other (income) and expense
Derivative Instruments, Gain (Loss)
Gains/(losses) of total hedge activity	(160)	(101)
Interest expense
Derivative Instruments, Gain (Loss)
Gains/(losses) of total hedge activity	5	10
Services
Derivative Instruments, Gain (Loss)
Cost	7,775	7,843
Sales
Derivative Instruments, Gain (Loss)
Cost	1,585	1,624
Financing
Derivative Instruments, Gain (Loss)
Cost	$ 165	$ 181

Derivative Financial Instrume_7

Derivative Financial Instruments - Gains and Losses (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Derivative Instruments, Gain (Loss)
Gain (loss) recognized in earnings on derivatives	$ 3	$ (146)
Gain (loss) recognized in earnings attributable to risk being hedged	25	(50)
Cash flow hedges and net investment hedges
Derivative Instruments, Gain (Loss)
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Recognized in OCI	1,094	304
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI	(160)	(91)
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Amounts Excluded from Effectiveness Testing	6	27
Foreign exchange contracts | Derivative instruments in cash flow hedges
Derivative Instruments, Gain (Loss)
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Recognized in OCI	187	(180)
Foreign exchange contracts | Instruments in net investment hedges
Derivative Instruments, Gain (Loss)
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Recognized in OCI	907	485
Cost of services | Foreign exchange contracts | Derivative instruments in cash flow hedges
Derivative Instruments, Gain (Loss)
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI	14	10
Cost of sales | Foreign exchange contracts | Derivative instruments in cash flow hedges
Derivative Instruments, Gain (Loss)
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI	(22)	9
Cost of financing | Interest rate contracts | Derivative instruments in fair value hedges
Derivative Instruments, Gain (Loss)
Gain (loss) recognized in earnings on derivatives	(1)	18
Gain (loss) recognized in earnings attributable to risk being hedged	7	(13)
Cost of financing | Interest rate contracts | Derivative instruments in cash flow hedges
Derivative Instruments, Gain (Loss)
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI	(1)	(1)
Cost of financing | Foreign exchange contracts | Derivative instruments in cash flow hedges
Derivative Instruments, Gain (Loss)
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI	(5)	(7)
Cost of financing | Foreign exchange contracts | Instruments in net investment hedges
Derivative Instruments, Gain (Loss)
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Amounts Excluded from Effectiveness Testing	2	7
SG&A expense | Foreign exchange contracts | Derivative instruments in cash flow hedges
Derivative Instruments, Gain (Loss)
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI	(15)	10
SG&A expense | Equity contracts | Not designated as hedging instruments - economic hedges
Derivative Instruments, Gain (Loss)
Gain (loss) recognized in earnings on derivatives	49	(201)
Other (income) and expense | Foreign exchange contracts | Derivative instruments in cash flow hedges
Derivative Instruments, Gain (Loss)
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI	(116)	(89)
Other (income) and expense | Foreign exchange contracts | Not designated as hedging instruments - economic hedges
Derivative Instruments, Gain (Loss)
Gain (loss) recognized in earnings on derivatives	(44)	(11)
Interest expense | Interest rate contracts | Derivative instruments in fair value hedges
Derivative Instruments, Gain (Loss)
Gain (loss) recognized in earnings on derivatives	(1)	49
Gain (loss) recognized in earnings attributable to risk being hedged	18	(37)
Interest expense | Interest rate contracts | Derivative instruments in cash flow hedges
Derivative Instruments, Gain (Loss)
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI	(3)	(3)
Interest expense | Foreign exchange contracts | Derivative instruments in cash flow hedges
Derivative Instruments, Gain (Loss)
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI	(13)	(18)
Interest expense | Foreign exchange contracts | Instruments in net investment hedges
Derivative Instruments, Gain (Loss)
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Amounts Excluded from Effectiveness Testing	$ 4	$ 20

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Stock-based compensation cost, allocation of recognized costs
Pre-tax stock-based compensation cost	$ 213	$ 189
Income tax benefits	(52)	(45)
Net stock-based compensation cost	161	144
Pre-tax stock-based compensation cost increase (decrease)	24
Unrecognized compensation cost related to non-vested awards	$ 1,200
Unrecognized compensation cost related to non-vested awards, weighted average period of recognition	2 years 1 month 6 days
Performance Share Units
Stock-based compensation cost, allocation of recognized costs
Pre-tax stock-based compensation cost increase (decrease)	$ 16
Restricted Stock Units
Stock-based compensation cost, allocation of recognized costs
Pre-tax stock-based compensation cost increase (decrease)	8
Cost
Stock-based compensation cost, allocation of recognized costs
Pre-tax stock-based compensation cost	41	27
SG&A expense
Stock-based compensation cost, allocation of recognized costs
Pre-tax stock-based compensation cost	123	117
Research, development and engineering
Stock-based compensation cost, allocation of recognized costs
Pre-tax stock-based compensation cost	$ 49	$ 45

Retirement-Related Benefits - A

Retirement-Related Benefits - All Retirement Plans Cost (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Retirement-Related Benefits
Defined benefit and contribution pension plans - cost	$ 672	$ 584
Nonpension postretirement plans - cost	44	52
Total	$ 717	$ 636
Year-to-year percent change, defined benefit and contribution pension plans cost (as a percent)	15.20%
Year-to-year percent change, nonpension postretirement plans cost (as a percent)	(14.50%)
Year-to-year percent change, total (as a percent)	12.80%

Retirement-Related Benefits - C

Retirement-Related Benefits - Cost of Pension Plans (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cost/(Income) of Pension Plans
Total defined benefit and contribution pension plans cost recognized in the Consolidated Income Statement	$ 672	$ 584
U.S. | Pension Plans
Cost/(Income) of Pension Plans
Interest cost	$ 277	$ 375
Interest cost - income statement location	Other (income) and expense	Other (income) and expense
Expected return on plan assets	$ (451)	$ (542)
Expected return on plan assets - income statement location	Other (income) and expense	Other (income) and expense
Amortization of prior service costs/(credits)	$ 4	$ 4
Amortization of prior service costs/(credits) - income statement location	Other (income) and expense	Other (income) and expense
Recognized actuarial losses	$ 249	$ 207
Recognized actuarial losses - income statement location	Other (income) and expense	Other (income) and expense
Total net periodic pension / nonpension (income)/cost of defined benefit plans	$ 80	$ 44
Cost of defined contribution plans	151	155
Total defined benefit and contribution pension plans cost recognized in the Consolidated Income Statement	231	199
Non-U.S. | Pension Plans
Cost/(Income) of Pension Plans
Service cost	92	95
Interest cost	$ 111	$ 129
Interest cost - income statement location	Other (income) and expense	Other (income) and expense
Expected return on plan assets	$ (291)	$ (309)
Expected return on plan assets - income statement location	Other (income) and expense	Other (income) and expense
Amortization of prior service costs/(credits)	$ (2)	$ (5)
Amortization of prior service costs/(credits) - income statement location	Other (income) and expense	Other (income) and expense
Recognized actuarial losses	$ 375	$ 342
Recognized actuarial losses - income statement location	Other (income) and expense	Other (income) and expense
Curtailments and settlements	$ 17	$ 8
Curtailments and settlements - income statement location	Other (income) and expense	Other (income) and expense
Multi-employer plans	$ 8	$ 7
Other costs/(credits)	$ 11	$ 5
Other costs/(credits) - income statement location	Other (income) and expense	Other (income) and expense
Total net periodic pension / nonpension (income)/cost of defined benefit plans	$ 322	$ 274
Cost of defined contribution plans	119	110
Total defined benefit and contribution pension plans cost recognized in the Consolidated Income Statement	$ 441	$ 385

Retirement-Related Benefits - N

Retirement-Related Benefits - Nonpension Postretirement Cost (Details) - Nonpension Postretirement Benefit Plans - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
U.S.
Nonpension postretirement plan cost
Service cost	$ 2	$ 2
Interest cost	$ 16	$ 26
Interest cost - income statement location	Other (income) and expense	Other (income) and expense
Amortization of prior service costs/(credits)	$ 1	$ 1
Amortization of prior service costs/(credits) - income statement location	Other (income) and expense	Other (income) and expense
Recognized actuarial losses	$ 13	$ 7
Recognized actuarial losses - income statement location	Other (income) and expense	Other (income) and expense
Total net periodic pension / nonpension (income)/cost of defined benefit plans	$ 32	$ 36
Non-U.S.
Nonpension postretirement plan cost
Service cost	1	1
Interest cost	$ 8	$ 10
Interest cost - income statement location	Other (income) and expense	Other (income) and expense
Expected return on plan assets	$ (1)	$ (1)
Expected return on plan assets - income statement location	Other (income) and expense	Other (income) and expense
Amortization of prior service costs/(credits)	$ 0	$ 0
Amortization of prior service costs/(credits) - income statement location	Other (income) and expense	Other (income) and expense
Recognized actuarial losses	$ 4	$ 6
Recognized actuarial losses - income statement location	Other (income) and expense	Other (income) and expense
Curtailments and settlements		$ 0
Curtailments and settlements - income statement location		Other (income) and expense
Total net periodic pension / nonpension (income)/cost of defined benefit plans	$ 12	$ 16

Retirement-Related Benefits -_2

Retirement-Related Benefits - Contributions (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Retirement-Related Benefits
Employer contributions	$ 172	$ 217
Contributions by employer - Noncash	129	70
Nonpension Postretirement Benefit Plans | Non-U.S. DB plans
Retirement-Related Benefits
Contributions by employer - Noncash	150	185
U.S.
Retirement-Related Benefits
Employer contributions	106	136
Non-U.S.
Retirement-Related Benefits
Employer contributions	$ 66	$ 82

Subsequent Events (Details)

Subsequent Events (Details) - Subsequent event	Apr. 27, 2021$ / shares
Subsequent Events
Dividend declared, date	Apr. 27, 2021
Dividend declared (in dollars per share)	$ 1.64
Dividend payable, date	Jun. 10, 2021
Shareholders of record, date	May 10, 2021