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目录
美国
证券交易委员会
华盛顿特区20549
表格 10-Q
季度报告 根据第13或15(d)条的报告
修改契约重制证明文件证券 1934年的交易所法案
截至本季度末 2024年9月30日
1-2360
（委托文件编号）
国际商业机器公司
(根据其章程规定的注册人准确名称)
纽约
(设立状态)
13-0871985
（纳税人识别号）
One New Orchard Road
阿蒙克, 纽约
，（主要行政办公地址）
10504
(邮政编码)
914-499-1900
（报告人电话号码）
在法案第12(b)条的规定下注册的证券：
每个课程的标题交易品种
注册的每个交易所的名称
股本，面值每股0.20美元IBM 公司纽约证券交易所
纽约证券交易所芝加哥
2.875% 2025 年到期的票据IBM 25A纽约证券交易所
2025 年到期的票据 0.950%IBM 25B纽约证券交易所
2025 年到期的 0.875% 票据IBM 25C纽约证券交易所
0.300% 2026 年到期的票据IBM 26B纽约证券交易所
1.250% 2027 年到期的票据IBM 27B纽约证券交易所
3.375% 2027 年到期的票据IBM 27F纽约证券交易所
0.300% 2028 年到期的票据IBM 28B纽约证券交易所
1.750% 2028 年到期的票据IBM 28A纽约证券交易所
1.500% 2029 年到期的票据IBM 29纽约证券交易所
0.875% 2030 年到期的票据IBM 30A纽约证券交易所
1.750% 2031年到期的票据IBM 31纽约证券交易所
3.625% 2031 年到期的票据IBM 31B纽约证券交易所
0.650% 2032年到期的票据IBM 32A纽约证券交易所
1.250% 2034 年到期的票据IBM 34纽约证券交易所
3.750% 2035 年到期的票据IBM 35纽约证券交易所
4.875% 2038 年到期的票据IBM 38纽约证券交易所
1.200% 2040 年到期的票据IBM 40纽约证券交易所
4.000% 2043 年到期的票据IBM 43纽约证券交易所
7.00% 2025 年到期的债券IBM 25纽约证券交易所
6.22% 2027 年到期的债券IBM 27纽约证券交易所
6.50% 2028年到期的债券IBM 28纽约证券交易所
5.875% 2032年到期的债券IBM 32D纽约证券交易所
7.00% 2045 年到期的债券IBM 45纽约证券交易所
7.125% 2096 年到期的债券IBM 96纽约证券交易所
请以复选标记表示：注册人（1）是否在过去12个月内（或注册人需要提交此类报告的较短期间，但必须提交此类报告的情况下）已提交证券交易法案1934年第13或15（d）条要求提出的所有报告，以及（2）在过去90天内是否受到过这些报告要求的约束。 是根据交易所法规12b-2中“大型加速文件报告人”，“加速文件报告人”，“小型报告公司”和“新兴增长公司”的定义，请勾选发行人是否为大型加速文件报告人。
请在以下勾选方框表示注册人是否已在Regulation S-T Rule 405规定的前12个月(或在注册人需要提交此类文件的较短期间内)提交了每个互动数据文件。是根据交易所法规12b-2中“大型加速文件报告人”，“加速文件报告人”，“小型报告公司”和“新兴增长公司”的定义，请勾选发行人是否为大型加速文件报告人。
请勾选标记以说明注册人是大型快速申报人、加速申报人、非加速申报人、较小的报告公司还是新兴成长型公司。请查看《交易所法》第120亿.2条中“大型快速申报人”、“加速申报人”、“较小的报告公司”和“新兴成长型公司”的定义。
大型加速报告人
☒
加速报告人☐
非加速报告人
☐
小型报告公司☐
新兴成长公司 ☐
如果是新兴成长型公司，在选中复选标记的同时，如果公司已选择不使用根据证券交易法第13(a)条提供的任何新的或修订后的财务会计准则的延长过渡期来符合新的或修订后的财务会计准则，则表明该公司已选择不使用根据证券交易法第13(a)条提供的任何新的或修订后的财务会计准则的延长过渡期来符合新的或修订后的财务会计准则。☐
请勾选以下选项以指示注册人是否为外壳公司(根据交易所法规则12b-2定义)。是☐否 ☒
截至2024年5月17日，申报人共有 924,645,152 2024年9月30日，普通股的流通股数。

目录
指数

2
目录
第I部分-财务信息
项目1. 综合财务报表:
国际商业机器公司
及其子公司
合并利润表
(未经审计)
截至9月30日的三个月截至9月30日的九个月
（除每股数据外，单位为百万美元） 2024202320242023
营业收入：    
服务$7,453 $7,541 $22,329 $22,618 
销售7,334 7,025 22,329 21,296 
融资情况180 186 542 566 
总收入14,968 14,752 45,199 44,479 
成本：    
服务5,048 5,217 15,414 15,821 
销售1,404 1,419 4,393 4,329 
融资情况95 94 281 297 
总成本6,548 6,729 20,087 20,446 
毛利润8,420 8,023 25,112 24,033 
费用和其他收入：    
销售、一般及行政费用4,911 4,458 14,823 14,212 
研究、开发和工程1,876 1,685 5,512 5,027 
知识产权和定制开发收入(238)(190)(696)(618)
其他（收入）和支出2,244 (215)1,694 (721)
利息支出429 412 1,288 1,202 
总支出和其他(收入)9,222 6,150 22,621 19,102 
继续经营活动净利润/(亏损)税前
(802)1,873 2,491 4,931 
所得税借项（或贷项）(485)159 (597)702 
持续经营活动的收入/(亏损)
$(317)$1,714 $3,088 $4,229 
已中止运营的业务净损益税后(13)(10)21 (15)
净利润 (1)
$(330)$1,704 $3,109 $4,214 
普通股每股收益/（亏损）： (1)
    
假定已行权：    
持续经营业务$(0.34)$1.86 $3.30 $4.59 
已停业的业务(0.01)(0.01)0.02 (0.02)
总费用$(0.36)$1.84 $3.32 $4.58 
基本的：    
持续经营业务$(0.34)$1.88 $3.36 $4.65 
已停业的业务(0.01)(0.01)0.02 (0.02)
总费用$(0.36)$1.87 $3.38 $4.63 
普通股加权平均流通股数：（百万）    
假设稀释923.6 923.7 935.4 920.3 
基本923.6 912.8 920.3 910.1 
(1)2024年包括一次性、非现金的养老金结算费用的影响。有关更多信息，请参阅第18条“养老相关福利”注释。
（由于四舍五入，金额可能不匹配。）
(附注是基本报表的一部分。)
3
目录
国际商业机器公司
及其子公司
综合利润表
(未经审计)
截至9月30日的三个月 截至9月30日的九个月
(金额单位：百万美元) 2024 2023 2024 2023
净利润/(净亏损)$(330)$1,704 $3,109 $4,214 
其他全面收益/(损失)，税前：    
外币翻译调整(330)151 (273)180 
可供出售证券方面的净变动：    
期间内产生的未实现收益/(损失)0 0 1 (1)
将(收益)/损失重新分类至净利润— — — — 
可供出售证券相关的净变动合计0 0 1 (1)
现金流量套期交易的未实现收益/(损失):    
在期间发生的未实现收益/(损失)(215)131 64 279 
将(收益)/损失重新分类至净利润(234)202 (206)51 
现金流量套期交易的总未实现收益/(损失)(449)333 (142)330 
养老相关的福利计划:    
往期服务成本/(贷项)— — — — 
期间发生的净损失/收益100 102 101 104 
削减和解决2,727 2 2,731 7 
往期服务成本摊销/（贷项）
(2)(2)(5)(6)
净损失/收益摊销246 128 765 389 
养老相关福利计划总额3,072 230 3,592 494 
所得税前其他综合收益/(亏损)2,293 714 3,178 1,003 
与其他综合收益相关项目的所得税支出/收益(392)(313)(835)(361)
其他综合收益/(亏损)，税后净额1,900 402 2,343 642 
总综合收益$1,570 $2,105 $5,452 $4,857 
（由于四舍五入，金额可能不匹配。）
(附注是基本报表的一部分。)
4
目录
国际商业机器公司
和子公司
合并资产负债表
(未经审计)
资产
(金额单位：百万美元)2024年9月30日2023年12月31日
资产：  
流动资产：  
现金及现金等价物$13,197 $13,068 
受限现金17 21 
有价证券505 373 
Notes and accounts receivable — trade (net of allowances of $132的。192在2023年）
5,390 7,214 
Short-term financing receivables:
Held for investment (net of allowances of $115的。129在2023年）
5,256 6,102 
持有待售投资509 692 
其他应收账款（扣除$应收款项准备）35的。109 在2023年)
928 640 
库存，按平均成本或净可变现价值较低者计量：
成品169 78 
2023年3月31日结束的三个月内，我们在“石油田服务和设备”（"OFSE"）板块主要录得了$百万的存货减值。有关详细信息，请参见“注17. 重组、减值及其他”。1,199 1,083 
19,7821,367 1,161 
延缓成本966 998 
预付费用和其他流动资产2,408 2,639 
总流动资产30,543 32,908 
资产：固定资产17,994 18,122 
减：累计折旧12,380 12,621 
不动产、厂房和设备 - 净额5,614 5,501 
经营租赁资产-净额3,355 3,220 
长期融资应收款项（扣减$17的。27在2023年）
4,931 5,766 
预付养老金资产7,975 7,506 
延缓成本788 842 
递延所得税6,943 6,656 
商誉61,092 60,178 
无形资产净额11,090 11,036 
投资和其他资产2,009 1,626 
总资产$134,339 $135,241 
（由于四舍五入，金额可能不匹配。）
（附注是财务报表的一部分 ）
5
目录
国际商业机器公司
及其子公司
合并资产负债表–（续）
(未经审计)
负债和股东权益
（除每股数据外，单位为百万美元）2024年9月30日2023年12月31日
负债：
流动负债:  
税收$1,584 $2,270 
短期债务3,599 6,426 
应付账款3,274 4,132 
薪酬和福利3,250 3,501 
递延收益12,882 13,451 
经营租赁负债790 820 
其他应计费用和负债3,474 3,521 
流动负债合计28,853 34,122 
长期债务52,980 50,121 
养老和非养老后离职福利义务10,366 10,808 
递延收益3,666 3,533 
经营租赁负债2,757 2,568 
其他负债11,186 11,475 
负债合计109,809 112,628 
股东权益：  
IBM股东权益：  
普通股，每股面值 $，授权股数：百万股；发行股数：分别为2024年6月30日和2023年12月31日：百万股；流通股数：分别为2024年6月30日和2023年12月31日：百万股0.20 每股，以及其他股本资本
61,013 59,643 
已授权股数： 4,687,500,000
  
股份发行：2024 - 2,277,669,454
  
2023 - 2,266,911,160
  
保留盈余149,789 151,276 
库藏股-成本价(169,935)(169,624)
股份：2024 - 1,353,024,302
  
2023 - 1,351,897,514
  
累计其他综合收益/（亏损）(16,418)(18,761)
总IBM股东权益24,448 22,533 
非控制权益82 80 
股东权益总计24,530 22,613 
负债和所有者权益总额$134,339 $135,241 
（由于四舍五入，金额可能不匹配。）
(附注是基本报表的一部分。)
6
目录
国际商业机器公司
及其子公司
现金流量表合并报表
(未经审计)
截至9月30日的九个月
(金额单位：百万美元) 2024 2023
经营活动现金流量：  
净收入$3,109 $4,214 
调整净收益以使其与经营活动提供的现金流量相一致：  
养老金结算费用
2,725 — 
折旧(1)
1,644 1,568 
资本化软件和收购无形资产的摊销1,910 1,676 
以股票为基础的报酬计划966 843 
清售资产、资产出售和其他净利润/(损失) (2)
(632)(100)
经营性资产和负债变动，扣除收购/清售 (2) (3)
(607)1,267 
经营活动产生的现金流量净额9,115 9,468 
投资活动现金流量：  
购买固定资产、厂房及设备支付的现金
(745)(945)
处置固定资产、厂房和设备/其他的收益
536 137 
软件投资(496)(417)
收购企业，扣除现金净额(2,748)(4,945)
出售业务资产，扣除现金转移净额705 (4)
购买可变现证券及其他投资(6,501)(10,374)
处置可交易证券和其他投资所得款项5,691 6,642 
投资活动提供的净现金流量/（使用的现金流量）(3,558)(9,906)
筹集资金的现金流量：  
新增债务所得款项5,705 9,586 
支付清偿债务(6,491)(4,973)
90天内的短期借款／偿还 — 净额9 6 
普通股票回购以支付税款(539)(338)
融资 — 其他513 86 
支付现金分红派息(4,601)(4,522)
融资活动产生的现金流量净额(5,403)(154)
汇率变动对现金、现金等价物及受限制资金的影响(29)(120)
经营性现金流净额125 (713)
现金、现金等价物和受限现金截至1月1日13,089 7,988 
截至9月30日的现金、现金等价物和受限现金$13,214 $7,275 
(1) 其中包括2024年和2023年的经营租赁权利使用资产摊销费用为$0.7 十亿。
(2) 之前的期间已重新分类，以符合2024年的呈现方式。
(3) 请参考附注1“报告基础”获取更多信息。
（由于四舍五入，金额可能不匹配。）
（附注是财务报表的一部分 ）
7
目录
国际商业机器公司
及其子公司
股本变动表（续）
(未经审计)
（除每股数据外，单位为百万美元）普通股
股份和
额外的
实收资本
资本		 留存收益
收益		 国库
股票		 累积的
其他
综合
收益/（损失）		 IBM总计
股东权益
股权		 非公司治理股份
控制
利益		 总费用
股权
股本 - 2024年7月1日$60,501 $151,659 $(169,815)$(18,319)$24,026 $77 $24,103 
净利润/(损失)加其他全面收益/(损失):        
净利润/(净亏损) (330)  (330) (330)
其他综合收益/(亏损)   1,900 1,900  1,900 
总综合收益    $1,570  $1,570 
普通股股息支付 - common stock ($1.67每股)
 (1,542)  (1,542) (1,542)
员工计划下发行的普通股 (3,948,208股）
512    512  512 
购买 (1,000,001 股份）和销售（548,750 股份）的库存股票根据雇员计划——净
 3 (120) (118) (118)
非控股权益变动     5 5 
净资产–2024年9月30日$61,013 $149,789 $(169,935)$(16,418)$24,448 $82 $24,530 
(以百万美元计，每股金额除外)Common
股票及其
额外的
实收资本
资本		保留收益
累积盈余		金库
股票		累计
其他
综合
收益/（亏损）		IBM总额
股东权益
股权		Non-
控制
权益投资		总计
股权
股本 - 2023年7月1日$58,963 $149,318 $(169,581)$(16,499)$22,201 $70 $22,271 
净利润加其他综合损益：
       
净利润 1,704   1,704  1,704 
其他综合收益/(亏损)   402 402  402 
累计综合收益
    $2,105  $2,105 
普通股份现金分红派息 ($)1.66 每股)
 (1,515)  (1,515) (1,515)
员工计划发行普通股份 (2,501,236 股）
350    350 350
购买 (688,254 股份）及出售（299,359 股份）的库藏股票根据员工计划—分红派息
 (1)(60) (60) (60)
非控制权益变动     5 5 
权益－2023年9月30日$59,313 $149,506 $(169,640)$(16,098)$23,081 $75 $23,156 
（由于四舍五入，金额可能不匹配。）
(附注是基本报表的一部分。)

8
目录
国际商业机器公司
及其子公司
所有者权益变动表 - (续)
(未经审计)
（除每股数据外，单位为百万美元）普通股
股份和
额外的
实收资本
资本		留存收益
收益		国库
股票		累积的
其他
综合
收益/（损失）		IBM总计
股东权益
股权		非公司治理股份
控制
利益		总费用
股权
股本 - 2024年1月1日$59,643 $151,276 $(169,624)$(18,761)$22,533 $80 $22,613 
净利润加其他全面收益/(损失):        
净收入 3,109   3,109  3,109 
其他综合收益/(亏损)   2,343 2,343  2,343 
总综合收益
    $5,452  $5,452 
普通股分红支付（$5.00每股)
 (4,601)  (4,601) (4,601)
员工计划下发行的普通股（10,758,294股）
1,370    1,370  1,370 
购买（2,944,556 股份)和销售(1,817,768 股份)用于员工股票计划—净
 5 (311) (306) (306)
非控股权益变动     2 2 
所有者权益-2024年9月30日$61,013 $149,789 $(169,935)$(16,418)$24,448 $82 $24,530 
（除每股数据外，单位为百万美元）普通股
股份和
额外的
实收资本
资本		留存收益
收益		国库
股票		累积的
其他
综合
收益/（损失）		Total IBM
股东权益
股权		非公司治理股份
控制
利益		总费用
股权
2023年1月1日的股本$58,343 $149,825 $(169,484)$(16,740)$21,944 $77 $22,021 
净利润加其他综合收益/(损失):        
净收入 4,214   4,214  4,214 
其他综合收益/(亏损)   642 642  642 
总综合收益
    $4,857  $4,857 
普通股现金股息支付 ($4.97每股)
 (4,522)  (4,522) (4,522)
员工股份计划下发行的普通股 (8,081,507股）
970    970  970 
购买 (2,498,567 份额)及销售(分红派息1,443,664 份额)的资金股票计划下资本-净
 (11)(156) (167) (167)
非控股权益变动     (2)(2)
股本-2023年9月30日$59,313 $149,506 $(169,640)$(16,098)$23,081 $75 $23,156 
（由于四舍五入，金额可能不匹配。）
(附注是基本报表的一部分。)

目录
合并财务报表注释
1
1. 演示方式的基础：
国际商用机器公司（IBM或公司）的附带的合并基本报表和附注是根据美国通用会计准则（GAAP）编制的。这些财务报表和附注未经审计。根据公司管理层的意见，这些报表包括所有仅属正常循环性质的调整，以便对公司业务运营、财务状况和现金流进行公正陈述。
根据GAAP编制基本报表要求管理层对影响合并财务报表和附属披露中报告的资产、负债、营业收入、成本、费用和其他全面收益/(损失)金额的估计和假设进行评估。这些估计基于管理层对当前事件、历史经验、公司未来可能采取的行动以及被认为在当时情况下合理的各种其他假设的最佳了解。因此，实际结果可能与这些估计不同。
2024年9月，IBM合格个人养老金计划（合格PPP）从美国保诚保险公司（“保险公司”）购买了一份非参与型单一保费团体年金合同，并不可撤销地转让给了该保险公司约美元6 合格PPP的固定福利养老金债务和相关计划资产的数十亿美元，从而使公司的养老金债务和资产减少了相同金额。团体年金合同是使用合格PPP的资产购买的，不需要公司提供额外的资金捐助。由于这笔交易，该公司确认了一次性、非现金的税前养老金结算费用为美元2.7 十亿（美元）2.0 2024年第三季度扣除税款10亿美元），主要与加速确认合格PPP的累计精算亏损有关。这美元0.7 与和解费用相关的10亿美元税收优惠反映在截至2024年9月30日的九个月合并现金流量表中，调整运营资产和负债变动中的净收入/（亏损）与经营活动的净现金，扣除收购/剥离。有关其他信息，请参阅附注18 “与退休有关的福利”。
截至2024年9月30日，三个季度和九个月结束时，公司报告称所得税受益为$485万美元和597 分别为百万美元。2024年9月30日结束的三个月和九个月的税收受益，是由于将部分符合PPP合格定义的养老金义务和相关计划资产转移给了保险公司，如上所述。2024年9月30日结束的九个月的税收受益，也受益于第一季度解决了某些税务审计事项。截至2023年9月30日，三个季度和九个月结束时，公司报告称所得税准备金为$159万美元和702 百万美元，分别。
非控股权益金额作为减少在合并利润表中的其它收入和费用，对所呈现的期间的合并结果并不是很重要。
公司与第三方金融机构有供应商融资计划，公司同意在参与供应商原始发票到期日支付金融机构规定的金额，其平均期限为⋯天 90至120 保持公司标准付款条件一致。金融机构可以根据供应商的独立决定提供较早支付，但金额会有折扣。公司不会在安排中提供已担保的法律资产或其他担保形式。公司不是其供应商和金融机构之间安排的一方。这些义务在合并资产负债表中被确认为应付账款。这些计划下尚未履行的义务在2024年9月30日和2023年12月31日分别为$99万美元和101百万美元。
中期结果并不一定代表全年财务结果。此10-Q表格中包含的信息应与公司的2023年年度报告一起阅读。
在呈现的基本报表和表格中，由于使用四舍五入的目的，某些列和行可能不会加总。提供的百分比是根据基础整数金额计算的。某些往期金额已重新分类以符合当前期间呈现的变化。在适用的地方进行了标注。
10
目录
综合财务报表附注 — （续）

2. 会计变更:
新标准将被实施
所得税披露
准则/描述–发行日期：2023年12月。该指引要求将税率调解的披露细分为八大类别，对超过特定门槛的项目还需要进一步细分。此外，该指引要求披露按联邦、州和国外司法管辖区细分支付的所得税。
生效日期和采纳考虑事项。—该指导意见自2025年1月1日起生效，允许提前采纳。公司预计在生效日期采纳该指导意见。
财务报表或其他重要事项的影响。由于该指南仅涉及披露的变更，它将影响公司年度基本报表中的“税收”注释，但不会影响合并财务业绩。
分部报告披露
准则/描述–发行日期：2023年11月。根据此指引，要求披露定期提供给公司首席运营决策者并包含在每个报告的各个板块利润或损失中的重要板块费用。公司还必须披露“其他板块项目”，即每个报告的各板块利润或损失中，板块营业收入减去重要费用之间的差异，以及其构成的描述。此指引还要求所有板块的年度披露以临时基础提供。
生效日期和采纳考虑事项。该准则适用于2024年起的年度期间以及2025年1月1日起的中间期间，并要求在所有以前期间上以追溯方式应用。允许提前采纳。公司将于生效日期采纳该指导。
财务报表或其他重要事项的影响。由于该指引仅对披露内容进行了更改，因此将会影响公司季度和年度基本报表中的“业务分部”附注，但不会影响合并财务报表的结果。
实施标准
供应商融资计划义务披露
标准/说明–发布日期：2022年9月。本指南要求实体就与采购商品或服务有关的供应商融资计划提供某些中期和年度披露。
生效日期和采纳考虑-指南自2023年1月1日起生效，要求进行某些年度披露始于2024年，并允许提前采纳。公司在生效日期之日采纳了该指南。
财务报表或其他重要事项的影响 -由于该指引仅涉及披露的变更，并未对合并财务结果产生影响。有关额外披露信息，请参阅附注1“报告编制基础”章节。


11
目录
综合财务报表附注 — （续）
3. 营业收入确认：
订阅和支持收入包括以下内容（以百万美元为单位）：
以下表格提供了主要产品/服务提供方面的营业收入细节和按地理位置划分的营业收入。
主要产品/服务项目的营业收入
截至9月30日的三个月截至9月30日的九个月
(金额单位：百万美元)2024
2023 (1)
2024
2023 (1)
混合平台及解决方案$4,600 $4,187 $13,272 $12,388 
交易处理1,925 1,759 5,889 5,444 
软件总额$6,524 $5,947 $19,162 $17,832 
业务转型2,327 2,291 7,004 6,869 
应用程序运营1,921 1,944 5,761 5,924 
科技咨询905 943 2,752 2,808 
总体咨询$5,152 $5,178 $15,517 $15,601 
混合制造行业1,765 1,943 5,928 5,912 
制造行业压力位1,277 1,329 3,835 4,076 
总体制造行业$3,042 $3,272 $9,764 $9,988 
融资(2)
181 186 543 566 
其他68 170 214 491 
总收入$14,968 $14,752 $45,199 $44,479 
(1)根据2024年1月份的业务板块变化进行重新调整。有关更多信息，请参阅附注4“业务板块”。
(2)包含租赁和贷款融资安排，不适用于与客户签订合同的营业收入指南。
地理区域营收
 截至9月30日的三个月 截至9月30日的九个月
（百万美元）2024202320242023
美洲$7,453 $7,686 $22,727 $22,810 
欧洲/中东/非洲4,584 4,223 13,619 13,156 
亚太地区2,932 2,843 8,853 8,513 
总计$14,968 $14,752 $45,199 $44,479 
剩余绩效承诺
剩余履约责任（RPO）披露提供了截至报告期末尚未确认交易价格的总金额，并解释公司预计何时将这些金额确认为营业收入。它旨在表明尚未执行的合同下的整体工作声明，并不包括客户未承诺的合同，如某些作为服务、政府、期限软件许可和服务产品。当客户能够无需支付实质性罚款而随时方便终止时，客户并不被视为承诺。披露包括变量考虑的估计，除非变量考虑是承诺以交换知识产权许可的基于销售或使用的专利费。此外，作为一种便利措施，公司不包括原始持续时间为另外一个以下。RPO估计可能会发生变化，受到多种因素的影响，包括终止、合同范围的变更、定期重新确认、未实现的营业收入调整以及货币调整。 一年 或更少。RPO估计可能会发生变化，受到多种因素的影响，包括终止、合同范围的变更、定期重新确认、未实现的营业收入调整以及货币调整。

12
目录
综合财务报表附注 — （续）
2024年9月30日，分配给与客户合同相关的RPO且尚未满足或部分未满足的交易价格总额约为$57 十亿。预计该金额的大约 70 百分比将在随后的营业中确认 发生约为 27 百分之二十在随后的营业中 三至月内。2023年和2022年的三个和九个月期权授予均以授予日公司普通股的公允价值相等的行权价格授予，并且是非法定股票期权。 并且之后的余额。
在以往期间已实现的绩效义务
截至2024年9月30日的三个和九个月，对于在之前期间履行或部分履行的绩效承诺，已确认的营业收入是不重要的。
合同余额调节
以下表格提供了有关票据和应收账款-交易、合同资产和递延收入余额的信息。
(金额单位：百万美元)2024年9月30日2023年12月31日
票据和应收账款 — 贸易（减除$津贴后净额 132的。192在2023年）
$5,390 $7,214 
合同资产 (1)
$572 $505 
递延收入（流动）$12,882 $13,451 
递延收入（非流动）$3,666 $3,533 
(1)包含在资产负债表中的预付费用和其他流动资产中。
在2024年9月30日结束的九个月中确认的营业收入金额，包括在2023年12月31日的递延收入余额内，为$9.5 亿美元，主要与软件和服务相关。
以下表格提供了截至2024年9月30日和2023年12月31日的九个月的应收帐款-交易应收账款的预期信用损失回拨情况。
(金额单位：百万美元)    
2024年1月1日，到期日期。增补/(发布)
核销 (1)
外汇及其他货币2024年9月30日
$192$4$(71)$7$132
2023年1月1日增加 / (发布)
核销 (1)
外汇及其他货币2023年12月31日
$233$32$(79)$6$192
(1)此期间大部分核销涉及之应收款项为先前已备抵。
预计信贷损失合同资产准备金在任何期间都不是重要的。
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目录
综合财务报表附注 — （续）

4. 片段：检测类型（血统和亲属关系测试，营养基因组学测试，预测测试，携带者测试，其他测试类型）；技术（单核苷酸多态性（SNP）芯片，靶向分析，整个基因组测序（WGS））；分销渠道（在线，非处方药）
在2024年第一季度，该公司对其组织结构和管理系统进行了调整，以更好地与市场结构保持一致，增加透明度和改善与同行的段可比性。 这些变化并未影响公司的合并财务报表，但影响了其可报告部门。 由于移除了特定部门利润的某些元件，如下所述，该公司还将其部门绩效指标的标题从持续经营的税前收入更新为部门利润。
以下表格显示了段更新：
报告段变更
导致的部门影响
气象公司资产剥离 (1)
-
软件部门
+
其他-出售的业务
安防-半导体服务重组
-
软件部门
+咨询部门
从部门盈利中移除基于股票的补偿和净利息分配
-
软件部门, 咨询部门, 制造行业部门, 融资部门 (2)
+其他
(1) 天气公司资产出售已于2024年1月31日关闭。
(2) 融资业务利息的披露未发生变化。
以下表格反映了公司各部门持续运营的结果，这与公司内部采用的管理和计量系统一致，并已重新调整为以前年度的结果，以反映上述公司部门变更。这些结果被首席运营决策者使用，既用于评估各部门的表现，也用于分配资源。
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目录
综合财务报表附注 — （续）

板块信息
(金额单位：百万美元)软件咨询制造行业融资情况总费用
业务板块
截至2024年9月30日的三个月：     
营业收入$6,524 $5,152 $3,042 $181 $14,900 
业务板块利润
$1,969 $559 $422 $86 $3,037 
营业收入同比变化9.7 %(0.5)%(7.0)%(2.5)%2.2 %
部门利润同比变化14.4 %(1.2)%(13.8)%(5.9)%5.8 %
分部利润率30.2 %10.9 %13.9 %47.5 %20.4 %
截至2023年9月30日三个月： (1)
     
营业收入$5,947 $5,178 $3,272 $186 $14,582 
业务板块利润
$1,722 $566 $490 $91 $2,869 
分部利润率29.0 %10.9 %15.0 %49.2 %19.7 %
(1) 重新调整以反映2024年1月的部分变更。
按IBM报告的调解：
(金额单位：百万美元)  
截至9月30日结束的三个月：2024
2023 (1)
营业收入：  
总报告段落$14,900 $14,582 
其他‒已剥离的业务
0 103 
其他收入68 66 
持续经营的总营业收入$14,968 $14,752 
持续经营前税收收入/(亏损):
  
报告分部总利润
$3,037 $2,869 
取得的无形资产摊销(482)(414)
与收购相关的费用/(收入)(10)(25)
非经营性养老相关费用/(收入) (2)
(2,797)12 
以股票为基础的报酬计划(330)(286)
不包括融资部门的净利息 (265)(262)
员工再平衡费用
(306)(34)
其他‒已剥离的企业
(4)28 
未分配的公司款项和其他 (3)
355 (15)
持续经营的税前收益/(亏损)总额
$(802)$1,873 
(1)重新调整以反映2024年1月段变化。
(2)2024年包括一次性、非现金的养老金解决费用影响$2.7 十八号注释中有关"养老相关福利"的更多信息。
(3)2024年包括从出售某些QRadar saas-云计算资产中获得的收益。请参阅附注5“收购和剥离”以获取更多信息。

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目录
综合财务报表附注 — （续）
板块信息
（以百万美元计）软件咨询基础架构融资总计
细分市场
在截至2024年9月30日的九个月中：     
收入$19,162 $15,517 $9,764 $543 $44,985 
分部利润$5,582 $1,447 $1,387 $254 $8,670 
收入逐年变化7.5 %(0.5)%(2.3)%(4.1)%2.3 %
分部利润同比变化15.1 %(1.9)%(9.3)%(0.5)%6.9 %
分部利润率29.1 %9.3 %14.2 %46.9 %19.3 %
在截至 2023 年 9 月 30 日的九个月中： (1)
     
收入$17,832 $15,601 $9,988 $566 $43,988 
分部利润$4,850 $1,476 $1,529 $256 $8,110 
分部利润率27.2 %9.5 %15.3 %45.2 %18.4 %
(1) Recast to reflect January 2024 segment changes.
Reconciliations to IBM as Reported:
(Dollars in millions)  
For the nine months ended September 30:2024
2023 (1)
Revenue:  
Total reportable segments$44,985 $43,988 
Other‒divested businesses
35 298 
Other revenue178 193 
Total revenue from continuing operations$45,199 $44,479 
Pre-tax income from continuing operations:  
Total reportable segment profit$8,670 $8,110 
Amortization of acquired intangible assets(1,348)(1,194)
Acquisition-related (charges)/income (2)
(106)(35)
Non-operating retirement-related (costs)/income (3)
(2,991)16 
Stock-based compensation(966)(843)
Net interest excluding the Finance segment(706)(704)
Workforce rebalancing changes(698)(410)
Other‒divested businesses (4)
231 63 
Unallocated corporate amounts and other (5)
404 (72)
Total pre-tax income from continuing operations$2,491 $4,931 
(1)Recast to reflect January 2024 segment changes.
(2)2024 includes the impact of foreign exchange derivative contracts entered into by the company prior to the acquisition of StreamSets and webMethods from Software AG. Refer to note 16, "Derivative Financial Instruments," for additional information.
(3)2024 includes the impact of a one-time, non-cash pension settlement charge of $2.7 billion. Refer to note 18, "Retirement-Related Benefits," for additional information.
(4)2024 includes a gain from the divestiture of The Weather Company assets. Refer to note 5, "Acquisitions & Divestitures," for additional information.
(5)2024 includes a gain from the sale of certain QRadar SaaS assets. Refer to note 5, "Acquisitions & Divestitures," for additional information.
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Notes to Consolidated Financial Statements — (continued)

5. Acquisitions & Divestitures:
Acquisitions
Purchase price consideration for all acquisitions was paid primarily in cash. All acquisitions, unless otherwise stated, were for 100 percent of the acquired business and are reported in the Consolidated Statement of Cash Flows, net of acquired cash and cash equivalents.
During the nine months ended September 30, 2024, the company completed five acquisitions within the Software segment and three acquisitions within the Consulting segment at an aggregate cost of $2,798 million. These acquisitions are expected to enhance the company’s portfolio of products and services capabilities and further advance IBM’s hybrid cloud and AI strategy.
At September 30, 2024, the remaining cash to be remitted by the company related to 2024 acquisitions was not material.
The following table reflects the purchase price related to these acquisitions and the resulting purchase price allocation as of September 30, 2024.
(Dollars in millions)Amortization
Life (in years)
StreamSets and webMethods
Other
Acquisitions
Current assets$364 $57 
Property, plant and equipment/noncurrent assets12 9 
Intangible assets:
 GoodwillN/A1,072 390 
 Client relationships
1-7
680 82 
 Completed technology
5-7
550 63 
 Trademarks
2-7
45 4 
Total assets acquired$2,723 $605 
Current liabilities209 39 
Noncurrent liabilities251 31 
Total liabilities assumed$461 $70 
Total purchase price$2,262 $535 
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 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.
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Notes to Consolidated Financial Statements — (continued)
StreamSets and webMethods — On July 1, 2024, the company completed the acquisition of StreamSets and webMethods from Software AG for approximately $2.3 billion (€2.13 billion) in cash. StreamSets will add new data ingestion capabilities to IBM's data platform and webMethods will bring integration platform-as-a-service (iPaaS) capabilities to IBM's automation solutions. Goodwill of $1,072 million was assigned to the Software segment. It is expected that 56 percent of the goodwill will be deductible for tax purposes. The overall weighted-average useful life of the identified amortizable intangible assets acquired was 7.0 years. The acquisition will be integrated into the Software segment. Prior to the acquisition, the company entered into foreign currency derivative contracts which expired by June 28, 2024. Refer to note 16, “Derivative Financial Instruments,” for financial impacts and additional information.
Other Acquisitions — Goodwill of $216 million, $166 million and $8 million was assigned to the Consulting, Software and Infrastructure segments, respectively. It is expected that 12 percent of the goodwill will be deductible for tax purposes. The overall weighted-average useful life of the identified amortizable intangible assets acquired was 6.5 years.
The identified intangible assets will be amortized on a straight-line basis over their useful lives, which approximates the pattern that the assets’ economic benefits are expected to be consumed over time.
Transactions Closed in Fourth-Quarter 2024 — On October 10, 2024, the company completed an acquisition within the Software segment which is not expected to have a material impact on the company's Consolidated Financial Statements.
Transactions Announced — On April 24, 2024, the company announced its intent to acquire all of the outstanding shares of HashiCorp, Inc. (HashiCorp). IBM’s and HashiCorp’s combined portfolios will help clients manage growing application and infrastructure complexity and create a comprehensive end-to-end hybrid cloud platform designed for the AI era. Under the terms of the definitive agreement, HashiCorp's shareholders on record immediately prior to the effective time on the closing date will receive $35 per share in cash, representing a total enterprise value of approximately $6.4 billion. On July 15, 2024, HashiCorp stockholders voted to approve the merger with IBM. The transaction is expected to close by the end of 2024, subject to regulatory approvals and other customary closing conditions. Upon closing, HashiCorp will be integrated into the Software segment.
On September 9, 2024, the company announced its intent to acquire a global Oracle services provider. The acquisition is expected to close in the fourth quarter of 2024, subject to regulatory approvals and other customary closing conditions. Upon closing, the acquisition will be included in "Other Acquisitions" in the purchase price allocation table and will be integrated into the Consulting segment.
Divestitures
The Weather Company Assets — On January 31, 2024, the company completed the sale of The Weather Company assets to Zephyr Buyer, L.P., a wholly-owned subsidiary of Francisco Partners (collectively, Francisco). Under the agreement, Francisco acquired The Weather Company assets from IBM for $1,100 million inclusive of $250 million of contingent consideration, of which $200 million is contingent on Francisco’s attainment of certain investment return metrics. The assets include The Weather Company's digital consumer-facing offerings, The Weather Channel mobile and cloud-based digital properties including Weather.com, Weather Underground and Storm Radar, as well as its enterprise offerings for broadcast, media, aviation, advertising technology and data solutions for other emerging industries.
Upon closing, the company received cash proceeds of $750 million and provided seller financing to Francisco in the form of a $100 million loan with a term of 7 years. The cash proceeds from the sale were primarily included in cash from investing activities within the Consolidated Statement of Cash Flows. The seller financing is a non-cash investing activity. For the nine months ended September 30, 2024, the company recognized a pre-tax gain on sale of $241 million in other (income) and expense in the Consolidated Income Statement. As discussed in note 4, “Segments,” in the first quarter of 2024, The Weather Company assets previously reported in the Software segment were moved and recast to the Other–divested businesses category.
Sale of Assets
On August 31, 2024, the company completed the sale of certain QRadar SaaS (software-as-a-service) assets including QRadar intellectual property, customer relationships and customer contracts to Palo Alto Networks (Palo Alto). Upon closing, the company received cash proceeds of $500 million from Palo Alto. Proceeds of $437 million from the sale were
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Notes to Consolidated Financial Statements — (continued)
included in proceeds from disposition of property, plant and equipment/other within cash from investing activities and the remaining $63 million related to transition and migration services described below were included within cash from operating activities in the Consolidated Statement of Cash Flows. The company recognized a pre-tax gain on sale of $351 million at closing in other (income) and expense in the Consolidated Income Statement.
In connection with the sale of the QRadar SaaS assets, IBM and Palo Alto will facilitate the migration of QRadar SaaS and IBM's QRadar on-premise (on-prem) clients who choose to migrate to Palo Alto's Cortex XSIAM, their security operations (SOC) platform. As part of the agreement, IBM will receive incremental future cash payments from Palo Alto for QRadar on-prem clients who choose to migrate to the Cortex XSIAM platform. Until this migration is completed, or contracts expire, the contractual relationship with certain QRadar SaaS and IBM's QRadar on-prem clients remains with IBM. IBM also provides Palo Alto with transition services including support, operations and other services for QRadar SaaS customer contracts. The client migrations to Cortex XSIAM platform and transition services did not have a material impact on IBM's Consolidated Financial Statements during the third quarter of 2024.
6. Other (Income) and Expense:
Components of other (income) and expense are as follows:
Three Months Ended September 30,Nine Months Ended September 30,
(Dollars in millions)2024202320242023
Other (income) and expense:
(Gains)/losses on foreign currency transactions (1)
$470 $(260)$126 $(338)
(Gains)/losses on derivative instruments (1)
(428)316 (1)315 
Interest income(170)(156)(597)(527)
Net (gains)/losses from securities and investment assets(4)(5)(14)3 
Retirement-related costs/(income) (2)
2,797 (12)2,991 (16)
Other (3)
(422)(97)(810)(158)
Total other (income) and expense$2,244 $(215)$1,694 $(721)
(1)The company uses financial hedging instruments to limit specific currency risks related to foreign currency-based transactions. The hedging program does not hedge 100 percent of currency exposures and defers, versus eliminates, the impact of currency. Refer to note 16, "Derivative Financial Instruments," for additional information on foreign exchange risk.
(2)2024 amounts include the impact of a one-time, non-cash, pre-tax pension settlement charge of $2.7 billion. Refer to note 18, "Retirement-Related Benefits," for additional information.
(3)2024 amounts include a pre-tax gain of $351 million from the sale of certain QRadar SaaS assets. The nine months ended September 30, 2024 also includes a pre-tax gain of $241 million from the divestiture of The Weather Company assets. Refer to note 5, "Acquisitions & Divestitures," for additional information.
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Notes to Consolidated Financial Statements — (continued)
7. Earnings Per Share of Common Stock:
The following tables provide the computation of basic and diluted earnings per share of common stock for the three and nine months ended September 30, 2024 and 2023.
（除每股数据外，单位为百万美元）
截至9月30日结束的三个月：20242023
基本每股盈利的计算基数：  
加权平均流通股份数：923,577,526912,790,387
加 — 股权激励计划下的增量股份：—8,531,982
加 — 与待发行股份相关的增量股份：—2,350,932
稀释每股盈利的计算基数：923,577,526923,673,300
持续经营活动的收入/(亏损)$(317)$1,714 
(损失) 来自已终止的经营活动，税后(13)(10)
基本每股收益计算基准的净利润/(损失)$(330)$1,704 
持续经营活动的收入/(亏损)$(317)$1,714 
适用于有潜在发行股份的净利润— — 
稀释每股收益计算基准的持续经营所得/(亏损)$(317)$1,714 
停止运作的(亏损)，税后，计算稀释每股收益的基准(13)(10)
稀释每股收益计算基准的净利润/(损失)$(330)$1,704 
普通股每股收益：  
假设稀释  
持续经营$(0.34)$1.86 
已停止的营运(0.01)(0.01)
总计$(0.36)$1.84 
基本
持续经营$(0.34)$1.88 
已停止的营运(0.01)(0.01)
总计$(0.36)$1.87 
购买期权的期权数 9,189 股数和 536,391 截至2024年和2023年9月30日，共有未发行的分享，但由于在各自期间的期权行使价格高于普通分享的平均市场价格，因此未计入稀释每股收益的计算，因而其影响将是反稀释的。
由于截至2024年9月30日的三个月内出现净亏损，为避免对每股股票基本按期权补偿计划列入的普通股的潜在摊薄股份和有条件发行的股份的计算产生的影响，这些股份被排除在摊薄每股盈利/(亏损)的计算之外。 12,348,507 和 2,520,759分别排除了每股收益/(亏损)的摊薄计算，因为这些股份的影响将会对每股收益/(亏损)产生抗摊薄效应。

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目录
综合财务报表附注 — （续）
(Dollars in millions except per share amounts)
For the nine months ended September 30:20242023
Number of shares on which basic earnings per share is calculated:  
Weighted-average shares outstanding during period920,347,948910,057,739
Add — Incremental shares under stock-based compensation plans12,829,5728,241,752
Add — Incremental shares associated with contingently issuable shares2,247,7122,024,201
Number of shares on which diluted earnings per share is calculated935,425,233920,323,692
Income from continuing operations
$3,088 $4,229 
Income/(loss) from discontinued operations, net of tax21 (15)
Net income on which basic earnings per share is calculated
$3,109 $4,214 
Income from continuing operations
$3,088 $4,229 
Net income applicable to contingently issuable shares— — 
Income from continuing operations on which diluted earnings per share is calculated
$3,088 $4,229 
Income/(loss) from discontinued operations, net of tax, on which diluted earnings per share is calculated21 (15)
Net income on which diluted earnings per share is calculated
$3,109 $4,214 
Earnings/(loss) per share of common stock:  
Assuming dilution  
Continuing operations$3.30 $4.59 
Discontinued operations0.02 (0.02)
Total$3.32 $4.58 
Basic
Continuing operations$3.36 $4.65 
Discontinued operations0.02 (0.02)
Total$3.38 $4.63 
Stock options to purchase 1,018,714 shares and 2,346,268 shares (average of first, second and third quarter share amounts) were outstanding as of September 30, 2024 and 2023, respectively, but were not included in the computation of diluted earnings per share because the exercise price of the options during the respective period was greater than the average market price of the common shares, and therefore, the effect would have been antidilutive.
8. 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.
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Notes to Consolidated Financial Statements — (continued)
When available, the company uses unadjusted quoted market prices in active markets to measure the fair value and classifies such items as Level 1. If quoted market prices are not available, fair value is based upon internally developed models that use current market-based or independently sourced market parameters such as interest rates and currency rates. Items valued using internally generated models are classified according to the lowest level input or value driver that is significant to the valuation.
The determination of fair value considers various factors including interest rate yield curves and time value underlying the financial instruments. For derivatives and debt securities, the company uses a discounted cash flow analysis using discount rates commensurate with the duration of the instrument.
In determining the fair value of financial instruments, the company considers certain market valuation adjustments to the “base valuations” calculated using the methodologies described below for several parameters that market participants would consider in determining fair value:
•Counterparty credit risk adjustments are applied to financial instruments, taking into account the actual credit risk of a counterparty as observed in the credit default swap market to determine the true fair value of such an instrument.
•Credit risk adjustments are applied to reflect the company’s own credit risk when valuing all liabilities measured at fair value. The methodology is consistent with that applied in developing counterparty credit risk adjustments, but incorporates the company’s own credit risk as observed in the credit default swap market.
The company holds investments primarily in time deposits, certificates of deposit, and U.S. government debt that are designated as available-for-sale. The primary objective of the company’s cash and debt investment portfolio is to protect principal by investing in very liquid investment securities with highly rated counterparties.
The company’s standard practice is to hold all of its debt security investments classified as available-for-sale until maturity. No impairments for credit losses and no material non-credit impairments were recorded for the three and nine months ended September 30, 2024 and 2023, respectively.
Certain non-financial assets such as property, plant and equipment (PP&E), operating right-of-use assets, goodwill and intangible assets are also subject to nonrecurring fair value measurements if they are deemed to be impaired. The impairment models used for non-financial assets depend on the type of asset. There were no material impairments of non-financial assets for the three and nine months ended September 30, 2024 and 2023, respectively.
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Notes to Consolidated Financial Statements — (continued)
The following table presents the company’s financial assets and financial liabilities that are measured at fair value on a recurring basis at September 30, 2024 and December 31, 2023.
Fair Value
Hierarchy
Level		At September 30, 2024At December 31, 2023
(Dollars in millions)
Assets (6)
Liabilities (7)
Assets (6)
Liabilities (7)
Cash equivalents: (1)
Time deposits and certificates of deposit (2)
2$6,331 N/A$7,206 N/A
Money market funds1432 N/A 494 N/A
Total cash equivalents$6,763 N/A$7,699 N/A
Equity investments1— N/A25 N/A
Debt securities-current (2)(3)
2505 N/A373 N/A
Debt securities-noncurrent (2)(4)
2,3107 N/A8 N/A
Derivatives designated as hedging instruments:
Interest rate contracts211 218 2 299 
Foreign exchange contracts260 276 131 275 
Derivatives not designated as hedging instruments:
Foreign exchange contracts (5)
217 6 115 19 
Equity contracts237 0 93 — 
Total$7,499 $500 $8,446 $593 
(1)Included within cash and cash equivalents in the Consolidated Balance Sheet.
(2)Available-for-sale debt securities with carrying values that approximate fair value.
(3)Term deposits and U.S. treasury bills that are reported within marketable securities in the Consolidated Balance Sheet.
(4)September 30, 2024 amount includes a $100 million seller financing loan in connection with the divestiture of The Weather Company assets reported within investments and sundry assets in the Consolidated Balance Sheet. Refer to note 5, "Acquisitions & Divestitures," for additional information.
(5)December 31, 2023 asset amount includes $62 million in foreign exchange call option contracts in connection with the acquisition of StreamSets and webMethods from Software AG. There were no associated derivatives outstanding at September 30, 2024. Refer to note 16, "Derivative Financial Instruments," for additional information.
(6)The gross balances of derivative assets contained within prepaid expenses and other current assets, and investments and sundry assets in the Consolidated Balance Sheet at September 30, 2024 were $84 million and $41 million, respectively, and at December 31, 2023 were $304 million and $37 million, respectively.
(7)The gross balances of derivative liabilities contained within other accrued expenses and liabilities, and other liabilities in the Consolidated Balance Sheet at September 30, 2024 were $248 million and $252 million, respectively, and at December 31, 2023 were $294 million and $299 million, respectively.
N/A – not applicable
Financial Assets and Liabilities Not Measured at Fair Value
Short-Term Receivables and Payables
Short-term receivables (excluding the current portion of long-term receivables) and other investments are financial assets with carrying values that approximate fair value. Accounts payable, other accrued expenses and short-term debt (excluding the current portion of long-term debt) are financial liabilities with carrying values that approximate fair value. If measured at fair value in the financial statements, these financial instruments would be classified as Level 3 in the fair value hierarchy, except for short-term debt which would be classified as Level 2.
Loans and Long-Term Receivables
Fair values are based on discounted future cash flows using current interest rates offered for similar loans to clients with similar credit ratings for the same remaining maturities. At September 30, 2024 and December 31, 2023, the difference between the carrying amount and estimated fair value for loans and long-term receivables was immaterial. If measured at fair value in the financial statements, these financial instruments would be classified as Level 3 in the fair value hierarchy.
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Notes to Consolidated Financial Statements — (continued)
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 $52,980 million and $50,121 million, and the estimated fair value was $51,718 million and $48,284 million at September 30, 2024 and December 31, 2023, respectively. If measured at fair value in the financial statements, long-term debt (including the current portion) would be classified as Level 2 in the fair value hierarchy.
9. Financing Receivables:
Financing receivables primarily consist of client loan and installment payment receivables (loans), investment in sales-type and direct financing leases (collectively referred to as client financing receivables) and commercial financing receivables. Loans are provided primarily to clients to finance the purchase of IBM hardware, software and services. Payment terms on these financing arrangements are for terms generally up to seven years. Investment in sales-type and direct financing leases relate principally to the company’s Infrastructure products and are for terms generally up to five years. Commercial financing receivables, which consist of both held-for-investment and held-for-sale receivables, relate primarily to working capital financing for business partners and distributors of IBM products and services. Payment terms for working capital financing generally range from 30 to 60 days.
A summary of the components of the company’s financing receivables is presented as follows:
Client Financing Receivables
Client Loan and Installment Payment ReceivablesInvestment in Sales-Type and Direct Financing
Commercial Financing Receivables
(Dollars in millions)Held forHeld for
At September 30, 2024(Loans)LeasesInvestment
Sale (1)
Total
Financing receivables, gross$6,286 $3,750 $675 $509 $11,220 
Unearned income(480)(370)— — (850)
Unguaranteed residual value— 457 — — 457 
Amortized cost$5,806 $3,837 $675 $509 $10,827 
Allowance for credit losses(75)(51)(5)— (131)
Total financing receivables, net$5,731 $3,786 $670 $509 $10,696 
Current portion$3,017 $1,570 $670 $509 $5,765 
Noncurrent portion$2,714 $2,216 $— $— $4,931 
Client Financing Receivables
Client Loan and Installment Payment ReceivablesInvestment in Sales-Type and Direct Financing
Commercial Financing Receivables
(Dollars in millions)Held forHeld for
At December 31, 2023(Loans)LeasesInvestment
Sale (1)
Total
Financing receivables, gross$7,060 $4,261 $1,160 $692 $13,173 
Unearned income(486)(429)— — (915)
Unguaranteed residual value— 458 — — 458 
Amortized cost$6,574 $4,290 $1,160 $692 $12,716 
Allowance for credit losses(87)(63)(6)— (156)
Total financing receivables, net$6,486 $4,227 $1,155 $692 $12,560 
Current portion$3,427 $1,520 $1,155 $692 $6,793 
Noncurrent portion$3,059 $2,707 $— $— $5,766 
(1)The carrying value of the receivables classified as held for sale approximates fair value.

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Notes to Consolidated Financial Statements — (continued)
The company has a long-standing practice of taking mitigation actions, in certain circumstances, to transfer credit risk to third parties. These actions may include credit insurance, financial guarantees, nonrecourse secured borrowings, transfers of receivables recorded as true sales in accordance with accounting guidance or sales of equipment under operating lease. Sale of receivables arrangements are also utilized in the normal course of business as part of the company’s cash and liquidity management.
Financing receivables pledged as collateral for secured borrowings were $289 million and $232 million at September 30, 2024 and December 31, 2023, respectively. These borrowings are included in note 12, “Borrowings.”
Transfer of Financial Assets
The company has an existing agreement with a third-party investor to sell IBM short-term commercial financing receivables on a revolving basis. This agreement previously allowed for sales up to $3.0 billion. In December 2023, the company amended and renewed its agreement for a one-year term, which reduced the limit to $1.3 billion in January 2024. In addition, the company enters into agreements with third-party financial institutions to sell certain of its client financing receivables, including both loan and lease receivables, for cash proceeds. There were no material client financing receivables transferred for the nine months ended September 30, 2024 and 2023.
The following table presents the total amount of commercial financing receivables transferred.
(Dollars in millions)
For the nine months ended September 30:20242023
Commercial financing receivables:
Receivables transferred during the period$5,590 $6,453 
Receivables uncollected at end of period (1)
$691 $836 
(1)Of the total amount of commercial financing receivables sold and derecognized from the Consolidated Balance Sheet, the amounts presented remained uncollected from business partners as of September 30, 2024 and 2023.
The transfer of these receivables qualified as true sales and therefore reduced financing receivables. The cash proceeds from the sales are included in cash flows from operating activities. For the nine months ended September 30, 2024 and 2023, the net loss, including fees, associated with the transfer of commercial financing receivables was $49 million and $69 million, respectively, and is included in other (income) and expense in the Consolidated Income Statement.
Financing Receivables by Portfolio Segment
The following tables present the amortized cost basis for client financing receivables at September 30, 2024 and December 31, 2023, further segmented by three classes: Americas, Europe/Middle East/Africa (EMEA) and Asia Pacific. The commercial financing receivables portfolio segment is excluded from the tables in the sections below as the receivables are short term in nature and the current estimated risk of loss and resulting impact to the company’s financial results are not material.
(Dollars in millions)    
At September 30, 2024:AmericasEMEAAsia PacificTotal
Amortized cost$5,731 $2,531 $1,381 $9,643 
Allowance for credit losses:    
Beginning balance at January 1, 2024$92 $48 $11 $150 
Write-offs$(1)$(1)$0 $(2)
Recoveries0 0 0 1 
Additions/(releases)(8)(6)(2)(16)
Other (1)
(7)0 0 (7)
Ending balance at September 30, 2024$75 $41 $10 $126 
(1)Primarily represents translation adjustments.
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Notes to Consolidated Financial Statements — (continued)
(Dollars in millions)    
At December 31, 2023:AmericasEMEAAsia PacificTotal
Amortized cost$6,488 $3,007 $1,368 $10,863 
Allowance for credit losses:   
Beginning balance at January 1, 2023$88 $60 $20 $168 
Write-offs$(9)$(1)$(8)$(18)
Recoveries0 2 3 5 
Additions/(releases)5 (14)(4)(12)
Other (1)
7 1 (1)8 
Ending balance at December 31, 2023$92 $48 $11 $150 
(1)Primarily represents translation adjustments.
When determining the allowances, financing receivables are evaluated either on an individual or a collective basis. For the company’s policy on determining allowances for credit losses, refer to note A, “Significant Accounting Policies,” in the company’s 2023 Annual Report.
Past Due Financing Receivables
The company summarizes information about the amortized cost basis for client financing receivables, including amortized cost aged over 90 days and still accruing, billed invoices aged over 90 days and still accruing, and amortized cost not accruing.
(Dollars in millions)Total
Amortized
Cost
Amortized
Cost
> 90 Days (1)
Amortized
Cost
> 90 Days and
Accruing (1)
Billed
Invoices
> 90 Days and
Accruing
Amortized
Cost
Not
Accruing (2)
At September 30, 2024:
Americas$5,731 $80 $17 $1 $66 
EMEA2,531 32 3 3 30 
Asia Pacific1,381 8 1 0 7 
Total client financing receivables$9,643 $120 $20 $4 $103 
(Dollars in millions)Total
Amortized
Cost
Amortized
Cost
> 90 Days (1)
Amortized
Cost
> 90 Days and
Accruing (1)
Billed
Invoices
> 90 Days and
Accruing
Amortized
Cost
Not
Accruing (2)
At December 31, 2023:
Americas$6,488 $111 $40 $6 $71 
EMEA3,007 31 1 1 31 
Asia Pacific1,368 9 1 0 8 
Total client financing receivables$10,863 $151 $43 $7 $110 
(1)At a contract level, which includes total billed and unbilled amounts for financing receivables aged greater than 90 days.
(2)Of the amortized cost not accruing, there was a related allowance of $99 million and $106 million at September 30, 2024 and December 31, 2023, respectively. Financing income recognized on these receivables was immaterial for the three and nine months ended September 30, 2024 and 2023, respectively.
Credit Quality Indicators
The company’s credit quality indicators, which are based on rating agency data, publicly available information and information provided by customers, are reviewed periodically based on the relative level of risk. The resulting indicators are a numerical rating system that maps to Moody’s Investors Service credit ratings as shown below. The company uses information provided by Moody’s, where available, as one of many inputs in its determination of customer credit ratings. The credit quality of the customer is evaluated based on these indicators and is assigned the same risk rating whether the receivable is a lease or a loan.
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Notes to Consolidated Financial Statements — (continued)
The following tables present the amortized cost basis for client financing receivables by credit quality indicator at September 30, 2024 and December 31, 2023, respectively. Receivables with a credit quality indicator ranging from Aaa to Baa3 are considered investment grade. All others are considered non-investment grade. The credit quality indicators reflect mitigating credit enhancement actions taken by customers which reduce the risk to IBM. Gross write-offs by vintage year at September 30, 2024 and December 31, 2023 were not material.
(Dollars in millions)AmericasEMEAAsia Pacific
At September 30, 2024:Aaa – Baa3
Ba1 – C
Aaa – Baa3
Ba1 – C
Aaa – Baa3
Ba1 – C
Vintage year:      
2024$1,377 $481 $448 $264 $423 $97 
20231,589 467 419 314 321 29 
20221,106 141 479 245 287 30 
2021335 35 158 45 64 25 
202057 26 42 27 48 13 
2019 and prior67 50 46 45 32 12 
Total$4,531 $1,201 $1,591 $940 $1,175 $206 
(Dollars in millions)AmericasEMEAAsia Pacific
At December 31, 2023:Aaa – Baa3
Ba1 – C
Aaa – Baa3
Ba1 – C
Aaa – Baa3
Ba1 – C
Vintage year:      
2023$2,292 $1,028 $750 $520 $501 $70 
20221,645 268 687 374 386 42 
2021655 85 284 83 110 40 
2020205 79 106 60 97 22 
2019104 23 58 38 40 8 
2018 and prior55 50 16 30 39 12 
Total$4,955 $1,533 $1,901 $1,106 $1,174 $195 
Modifications
The company did not have any significant modifications due to clients experiencing financial difficulty during the nine months ended September 30, 2024 or for the year ended December 31, 2023.
10. Leases:
Accounting for Leases as a Lessor
The following table presents amounts included in the Consolidated Income Statement related to lessor activity.
Three Months Ended September 30,Nine Months Ended September 30,
(Dollars in millions)2024202320242023
Lease income — sales-type and direct financing leases:
    
Sales-type lease selling price$48 $190 $528 $528 
Less: Carrying value of underlying assets (1)
(12)(42)(106)(133)
Gross profit$37 $148 $423 $395 
Interest income on lease receivables67 58 206 176 
Total sales-type and direct financing lease income$104 $206 $628 $571 
Lease income — operating leases
13 20 47 71 
Variable lease income16 12 54 47 
Total lease income$133 $238 $729 $689 
(1)Excludes unguaranteed residual value.
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Notes to Consolidated Financial Statements — (continued)
11. Intangible Assets Including Goodwill:
Intangible Assets
The following tables present the company's intangible asset balances by major asset class.
At September 30, 2024
(Dollars in millions)Gross Carrying
Amount		Accumulated
Amortization
Net Carrying
Amount (1)
Intangible asset class:
Capitalized software$1,450 $(634)$816 
Client relationships9,793 (4,218)5,574 
Completed technology6,258 (3,019)3,239 
Patents/trademarks1,869 (514)1,355 
Other (2)
136 (30)106 
Total$19,506 $(8,416)$11,090 
At December 31, 2023
(Dollars in millions)Gross Carrying
Amount		Accumulated
Amortization
Net Carrying
Amount (1)
Intangible asset class:
Capitalized software$1,636 $(762)$874 
Client relationships9,053 (3,500)5,553 
Completed technology5,713 (2,510)3,203 
Patents/trademarks1,821 (436)1,385 
Other (2)
41 (20)22 
Total$18,265 $(7,229)$11,036 
(1)Amounts as of September 30, 2024 and December 31, 2023 include an increase in net intangible asset balances of $6 million and $50 million, respectively, due to foreign currency translation.
(2)Other intangibles are primarily acquired proprietary and non-proprietary technology licenses, data, business processes, methodologies and systems.
The net carrying amount of intangible assets increased $53 million during the first nine months of 2024, primarily due to additions of acquired intangibles of $1,424 million, driven by the acquisition of StreamSets and webMethods in the current quarter, and additions of capitalized software, partially offset by intangible asset amortization. The aggregate intangible asset amortization expense was $705 million and $1,910 million for the three and nine months ended September 30, 2024, respectively, compared to $572 million and $1,676 million for the three and nine months ended September 30, 2023, respectively. During the nine months ended September 30, 2024, the company retired $681 million of fully amortized intangible assets, impacting both the gross carrying amount and accumulated amortization by this amount.
The future amortization expense relating to intangible assets currently recorded in the Consolidated Balance Sheet was estimated to be the following at September 30, 2024:
(Dollars in millions)Capitalized
Software		Acquired
Intangibles		Total
Remainder of 2024$155 $488 $643 
2025383 1,923 2,306 
2026217 1,899 2,116 
202760 1,879 1,939 
20280 1,576 1,576 
Thereafter0 2,510 2,510 
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Notes to Consolidated Financial Statements — (continued)
Goodwill
The changes in the goodwill balances by segment for the nine months ended September 30, 2024 and for the year ended December 31, 2023 were as follows:
(Dollars in millions)BalanceGoodwill
Additions
Purchase
Price
Adjustments (1)
Foreign
Currency
Translation
and Other
Adjustments (2)
Balance
Segment1/1/2024Divestitures9/30/2024
Software$46,447 $1,237 $(44)$— $(59)$47,581 
Consulting8,883 215 (3)(1)27 9,122 
Infrastructure4,384 8 (1)— (2)4,390 
Other (3)
464 — — (464)— — 
Total$60,178 $1,460 $(48)$(465)$(33)$61,092 

(Dollars in millions)BalanceGoodwill
Additions
Purchase
Price
Adjustments (1)
Foreign
Currency
Translation
and Other
Adjustments (2)
Balance
Segment
1/1/2023Divestitures12/31/2023
Software (4)
$42,712 $3,538 $(17)$— $214 $46,447 
Consulting (4)
8,409 403 2 — 69 8,883 
Infrastructure4,363 12 — — 8 4,384 
Other (4)
464 — — — — 464 
Total$55,949 $3,953 $(15)$— $291 $60,178 
(1)Includes measurement period adjustments related to business combinations that closed in the current and prior year.
(2)Primarily driven by foreign currency translation.
(3)In the first quarter of 2024, the company derecognized goodwill related to the divestiture of The Weather Company assets. Refer to note 5, "Acquisitions & Divestitures," for additional information.
(4)Recast to reflect January 2024 segment changes. Refer to note 4, "Segments," for additional information.
There were no goodwill impairment losses recorded during the nine months ended September 30, 2024 or the year ended December 31, 2023 and the company has no accumulated impairment losses. Purchase price adjustments recorded during the nine months ended September 30, 2024 and the year ended December 31, 2023 were related to acquisitions that were still subject to the measurement period that ends at the earlier of 12 months from the acquisition date or when information becomes available. Net purchase price adjustments recorded in the nine months ended September 30, 2024 and the year ended December 31, 2023 were not material.
12. Borrowings:
Short-Term Debt
The company's total short-term debt at September 30, 2024 and December 31, 2023 was $3,599 million and $6,426 million, respectively, and primarily consisted of current maturities of long-term debt detailed in "Long-Term Debt" below.
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Notes to Consolidated Financial Statements — (continued)
Long-Term Debt
Pre-Swap Borrowing
 BalanceBalance
(Dollars in millions)Maturities9/30/202412/31/2023
U.S. dollar debt (weighted-average interest rate at September 30, 2024): (1)
   
3.5%2024$1 $5,003 
5.1%20251,602 1,601 
3.7%20265,800 5,201 
3.3%20274,119 3,619 
5.0%20281,313 1,313 
3.6%20293,750 3,250 
2.0%20301,350 1,350 
4.8%2031500 — 
4.4%20321,850 1,850 
4.8%2033750 750 
4.9%20341,000 — 
8.0%203883 83 
4.5%20392,745 2,745 
2.9%2040650 650 
4.0%20421,107 1,107 
5.3%20441,000 — 
7.0%204527 27 
4.7%2046650 650 
4.3%20493,000 3,000 
3.0%2050750 750 
4.2%20521,400 1,400 
5.1%2053650 650 
5.3%20541,400 — 
7.1%2096316 316 
$35,815 $35,317 
Euro debt (weighted-average interest rate at September 30, 2024): (1)
1.1%2024$— $829 
1.6%20253,348 3,315 
2.3%20272,232 2,210 
0.7%20282,009 1,989 
1.5%20291,116 1,105 
0.9%20301,116 1,105 
2.7%20312,790 2,762 
0.7%20321,786 1,768 
1.3%20341,116 1,105 
3.8%20351,116 1,105 
1.2%2040949 939 
4.0%20431,116 1,105 
$18,693 $19,335 
Other currencies (weighted-average interest rate at September 30, 2024 in parentheses): (1)
  
Pound sterling (4.9%)
2038$1,006 $955 
Japanese yen (0.7%)
2026–2028887 1,251 
Other (13.8%)
2024–2027285 241 
$56,686 $57,099 
Finance lease obligations (4.9%)
2024–2034878 499 
$57,565 $57,598 
Less: net unamortized discount 837 838 
Less: net unamortized debt issuance costs 176 154 
Add: fair value adjustment (2)
 19 (60)
$56,570 $56,546 
Less: current maturities 3,590 6,425 
Total $52,980 $50,121 
(1)Includes notes, debentures, bank loans and secured borrowings.
(2)The portion of the company’s fixed-rate debt obligations that is hedged is reflected in the Consolidated Balance Sheet as an amount equal to the sum of the debt’s carrying value and a fair value adjustment representing changes in the fair value of the hedged debt obligations attributable to movements in benchmark interest rates.
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Notes to Consolidated Financial Statements — (continued)
The company’s indenture governing its debt securities and its various credit facilities each contain significant covenants which obligate the company to promptly pay principal and interest, limit the aggregate amount of secured indebtedness and sale and leaseback transactions to 10 percent of the company’s consolidated net tangible assets, and restrict the company’s ability to merge or consolidate unless certain conditions are met. The credit facilities also include a covenant on the company’s consolidated net interest expense ratio, which cannot be less than 2.20 to 1.0, as well as a cross default provision with respect to other defaulted indebtedness of at least $500 million.
The company is in compliance with its debt covenants and provides periodic certifications to its lenders. The failure to comply with its debt covenants could constitute an event of default with respect to the debt to which such provisions apply. If certain events of default were to occur, the principal and interest on the debt to which such event of default applied would become immediately due and payable.
On February 5, 2024, IBM International Capital Pte. Ltd (IIC), a wholly owned finance subsidiary of the company, issued $5.5 billion of U.S. dollar fixed rate notes (IIC Notes) in tranches with maturities ranging from 2 to 30 years and coupons ranging from 4.6 to 5.3 percent. These notes are fully and unconditionally guaranteed by the company.

IIC is a 100 percent owned finance subsidiary of IBM, as described by the SEC in Rule 13-01(a)(4)(vi) of Regulation S-X, the primary purpose of which is to borrow money to be made available for the benefit of IBM and its affiliates. The IIC Notes are fully and unconditionally guaranteed by IBM, and no other subsidiary of IBM guarantees the IIC Notes.

Pre-swap annual contractual obligations of long-term debt outstanding at September 30, 2024, were as follows:
(Dollars in millions)Total
Remainder of 2024$93 
20255,296 
20266,321 
20276,501 
20284,043 
Thereafter35,311 
Total$57,565 
Interest on Debt
(Dollars in millions)  
For the nine months ended September 30:20242023
Cost of financing$254 $255 
Interest expense1,288 1,202 
Interest capitalized10 7 
Total interest paid and accrued$1,552 $1,464 
Lines of Credit
The company has a $2.5 billion Three-Year Credit Agreement and a $7.5 billion Five-Year Credit Agreement (the Credit Agreements) with maturity dates of June 20, 2027 and June 22, 2029, respectively. The Credit Agreements permit the company and its subsidiary borrowers to borrow up to $10 billion on a revolving basis. At September 30, 2024, there were no borrowings by the company, or its subsidiaries, under these credit facilities.
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Notes to Consolidated Financial Statements — (continued)

13. Commitments:
The company’s extended lines of credit to third-party entities include unused amounts of $1.8 billion and $1.4 billion at September 30, 2024 and December 31, 2023, respectively. A portion of these amounts was available to the company’s business partners to support their working capital needs. In addition, the company has committed to provide future financing to its clients in connection with client purchase agreements for $1.8 billion and $1.9 billion at September 30, 2024 and December 31, 2023, respectively. The company collectively evaluates the allowance for these arrangements using a provision methodology consistent with the portfolio of the commitments. Refer to note A, “Significant Accounting Policies,” in the company’s 2023 Annual Report for additional information. The allowance for these commitments is recorded in other liabilities in the Consolidated Balance Sheet and was not material at September 30, 2024.
The company has applied the guidance requiring a guarantor to disclose certain types of guarantees, even if the likelihood of requiring the guarantor’s performance is remote. The following is a description of arrangements in which the company is the guarantor.
The company is a party to a variety of agreements pursuant to which it may be obligated to indemnify the other party with respect to certain matters. Typically, these obligations arise in the context of contracts entered into by the company, under which the company customarily agrees to hold the party harmless against losses arising from a breach of representations and covenants related to such matters as title to the assets sold, certain intellectual property rights, specified environmental matters, third-party performance of nonfinancial contractual obligations and certain income taxes. In each of these circumstances, payment by the company is conditioned on the other party making a claim pursuant to the procedures specified in the particular contract, the procedures of which typically allow the company to challenge the other party’s claims. While indemnification provisions typically do not include a contractual maximum on the company’s payment, the company’s obligations under these agreements may be limited in terms of time and/or nature of claim, and in some instances, the company may have recourse against third parties for certain payments made by the company.
It is not possible to predict the maximum potential amount of future payments under these or similar agreements due to the conditional nature of the company’s obligations and the unique facts and circumstances involved in each particular agreement. Historically, payments made by the company under these agreements have not had a material effect on the company’s business, financial condition or results of operations.
In addition, the company guarantees certain loans and financial commitments. The maximum potential future payment under these financial guarantees and the fair value of these guarantees recognized in the Consolidated Balance Sheet at September 30, 2024 and December 31, 2023 was not material.
Changes in the company’s warranty liability for standard warranties, which are included in other accrued expenses and liabilities and other liabilities in the Consolidated Balance Sheet, and for extended warranty contracts, which are included in deferred income in the Consolidated Balance Sheet, are presented in the following tables.
Standard Warranty Liability
(Dollars in millions)20242023
Balance at January 1$65 $79 
Current-period accruals53 53 
Accrual adjustments to reflect actual experience7 (14)
Charges incurred(61)(64)
Balance at September 30$64 $54 
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Notes to Consolidated Financial Statements — (continued)
Extended Warranty Liability
(Dollars in millions)20242023
Balance at January 1$184 $272 
Revenue deferred for new extended warranty contracts20 55 
Amortization of deferred revenue(88)(122)
Other (1)
(3)(4)
Balance at September 30$112 $201 
Current portion$72 $119 
Noncurrent portion$40 $82 
(1)Other primarily consists of foreign currency translation adjustments.
The decrease in extended warranty liability is primarily due to the company’s shift to alternative maintenance and support offerings without a warranty element.
14. Contingencies:
As a company with a substantial employee population and with clients in more than 175 countries, IBM is involved, either as plaintiff or defendant, in a variety of ongoing claims, demands, suits, investigations, tax matters and proceedings that arise from time to time in the ordinary course of its business. The company is a leader in the information technology industry and, as such, has been and will continue to be subject to claims challenging its IP rights and associated products and offerings, including claims of copyright and patent infringement and violations of trade secrets and other IP rights. In addition, the company enforces its own IP against infringement, through license negotiations, lawsuits or otherwise. Further, given the rapidly evolving external landscape of cybersecurity, AI, privacy and data protection laws, regulations and threat actors, the company and its clients have been and will continue to be subject to actions or proceedings in various jurisdictions. Also, as is typical for companies of IBM’s scope and scale, the company is party to actions and proceedings in various jurisdictions involving a wide range of labor and employment issues (including matters related to contested employment decisions, country-specific labor and employment laws, and the company’s pension, retirement and other benefit plans), as well as actions with respect to contracts, product liability, cybersecurity, data privacy, securities, foreign operations, competition law and environmental matters. These actions may be commenced by a number of different parties, including competitors, clients, current or former employees, government and regulatory agencies, stockholders and representatives of the locations in which the company does business. Some of the actions to which the company is party may involve particularly complex technical issues, and some actions may raise novel questions under the laws of the various jurisdictions in which these matters arise.
The company records a provision with respect to a claim, suit, investigation or proceeding when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Any recorded liabilities, including any changes to such liabilities for the quarter ended September 30, 2024 were not material to the Consolidated Financial Statements.
In accordance with the relevant accounting guidance, the company provides disclosures of matters for which the likelihood of material loss is at least reasonably possible. In addition, the company also discloses matters based on its consideration of other matters and qualitative factors, including the experience of other companies in the industry, and investor, customer and employee relations considerations.
With respect to certain of the claims, suits, investigations and proceedings discussed herein, the company believes at this time that the likelihood of any material loss is remote, given, for example, the procedural status, court rulings, and/or the strength of the company’s defenses in those matters. With respect to the remaining claims, suits, investigations and proceedings discussed in this note, except as specifically discussed herein, the company is unable to provide estimates of reasonably possible losses or range of losses, including losses in excess of amounts accrued, if any, for the following reasons. Claims, suits, investigations and proceedings are inherently uncertain, and it is not possible to predict the ultimate outcome of these matters. It is the company’s experience that damage amounts claimed in litigation against it are unreliable and unrelated to possible outcomes, and as such are not meaningful indicators of the company’s potential liability. Further, the company is unable to provide such an estimate due to a number of other factors with respect to these claims, suits,
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Notes to Consolidated Financial Statements — (continued)
investigations and proceedings, including considerations of the procedural status of the matter in question, the presence of complex or novel legal theories, and/or the ongoing discovery and development of information important to the matters.
The company reviews claims, suits, investigations and proceedings at least quarterly, and decisions are made with respect to recording or adjusting provisions and disclosing reasonably possible losses or range of losses (individually or in the aggregate), to reflect the impact and status of settlement discussions, discovery, procedural and substantive rulings, reviews by counsel and other information pertinent to a particular matter.
Whether any losses, damages or remedies finally determined in any claim, suit, investigation or proceeding could reasonably have a material effect on the company’s business, financial condition, results of operations or cash flows will depend on a number of variables, including: the timing and amount of such losses or damages; the structure and type of any such remedies; the significance of the impact any such losses, damages or remedies may have in the Consolidated Financial Statements; and the unique facts and circumstances of the particular matter that may give rise to additional factors. While the company will continue to defend itself vigorously, it is possible that the company’s business, financial condition, results of operations or cash flows could be affected in any particular period by the resolution of one or more of these matters.
The following is a summary of the more significant legal matters involving the company.
On June 8, 2021, IBM sued GlobalFoundries U.S. Inc. (GF) in New York State Supreme Court for claims including fraud and breach of contract relating to a long-term strategic relationship between IBM and GF for researching, developing, and manufacturing advanced semiconductor chips for IBM. GF walked away from its obligations and IBM is now suing to recover amounts paid to GF, and other compensatory and punitive damages, totaling more than $1.5 billion. On September 14, 2021, the court ruled on GF’s motion to dismiss. On April 7, 2022, the Appellate Division unanimously reversed the lower court’s dismissal of IBM’s fraud claim. IBM’s claims for breaches of contract, promissory estoppel, and fraud are proceeding.
On June 2, 2022, a putative class action lawsuit was filed in the United States District Court for the Southern District of New York alleging that the IBM Pension Plan miscalculated certain joint and survivor annuity pension benefits by using outdated actuarial tables in violation of the Employee Retirement Income Security Act of 1974. IBM, the Plan Administrator Committee, and the IBM Pension Plan are named as defendants. On April 4, 2024, the court dismissed the lawsuit with prejudice. On May 6, 2024, the plaintiffs appealed.
As disclosed in the Kyndryl Form 10 and subsequent Kyndryl public filings, in 2017 BMC Software, Inc. (BMC) filed suit against IBM in the United States District Court for the Southern District of Texas in a dispute involving IBM’s former managed infrastructure services business. On May 30, 2022, the trial court awarded BMC $718 million in direct damages and $718 million in punitive damages, plus interest and fees. On April 30, 2024, the United States Court of Appeals for the Fifth Circuit reversed and rendered the district court’s judgment in IBM’s favor. IBM does not believe it has any material exposure relating to this litigation. No material liability or related indemnification asset has been recorded by IBM.
The company is party to, or otherwise involved in, proceedings brought by U.S. federal or state environmental agencies under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), known as “Superfund,” or laws similar to CERCLA. Such statutes require potentially responsible parties to participate in remediation activities regardless of fault or ownership of sites. The company is also conducting environmental investigations, assessments or remediations at or in the vicinity of several current or former operating sites globally pursuant to permits, administrative orders or agreements with country, state or local environmental agencies, and is involved in lawsuits and claims concerning certain current or former operating sites.
The company is also subject to ongoing tax examinations and governmental assessments in various jurisdictions. Along with many other U.S. companies doing business in Brazil, the company is involved in various challenges with Brazilian tax authorities regarding non-income tax assessments and non-income tax litigation matters. The total potential amount related to all these matters for all applicable years is approximately $300 million. The company believes it will prevail on these matters and that this amount is not a meaningful indicator of liability.
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Notes to Consolidated Financial Statements — (continued)
15. Equity Activity:
Reclassifications and Taxes Related to Items of Other Comprehensive Income
(Dollars in millions)Before Tax
Amount		Tax (Expense)/
Benefit		Net of Tax
Amount
For the three months ended September 30, 2024:
Other comprehensive income/(loss):   
Foreign currency translation adjustments$(330)$270 $(60)
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 $0 
Unrealized gains/(losses) on cash flow hedges:  
Unrealized gains/(losses) arising during the period$(215)$57 $(158)
Reclassification of (gains)/losses to:
   
Cost of services(5)1 (4)
Cost of sales(3)1 (2)
Cost of financing2 0 1 
SG&A expense0 0 0 
Other (income) and expense(234)59 (175)
Interest expense8 (2)6 
Total unrealized gains/(losses) on cash flow hedges$(449)$116 $(333)
Retirement-related benefit plans: (1)
   
Prior service costs/(credits)$— $— $— 
Net (losses)/gains arising during the period100 (25)75 
Curtailments and settlements2,727 (686)2,041 
Amortization of prior service costs/(credits)(2)0 (1)
Amortization of net (gains)/losses246 (68)178 
Total retirement-related benefit plans$3,072 $(779)$2,293 
Other comprehensive income/(loss)$2,293 $(392)$1,900 
(1)These accumulated other comprehensive income (AOCI) components are included in the computation of net periodic pension cost and include the impact of a one-time, non-cash pension settlement charge of $2.7 billion ($2.0 billion net of tax) in the third quarter of 2024. Refer to note 18, “Retirement-Related Benefits,” for additional information.

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Notes to Consolidated Financial Statements — (continued)
Reclassifications and Taxes Related to Items of Other Comprehensive Income
(Dollars in millions)Before Tax
Amount		Tax (Expense)/
Benefit		Net of Tax
Amount
For the three months ended September 30, 2023:
Other comprehensive income/(loss):   
Foreign currency translation adjustments$151 $(164)$(13)
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$131 $(35)$95 
Reclassification of (gains)/losses to:   
Cost of services2 0 1 
Cost of sales5 (1)4 
Cost of financing3 (1)2 
SG&A expense4 (1)3 
Other (income) and expense175 (44)131 
Interest expense14 (4)11 
Total unrealized gains/(losses) on cash flow hedges$333 $(85)$248 
Retirement-related benefit plans: (1)
   
Prior service costs/(credits)$— $— $— 
Net (losses)/gains arising during the period102 (26)77 
Curtailments and settlements2 (1)1 
Amortization of prior service costs/(credits)(2)1 (2)
Amortization of net (gains)/losses128 (37)91 
Total retirement-related benefit plans$230 $(63)$167 
Other comprehensive income/(loss)$714 $(313)$402 
(1)These AOCI components are included in the computation of net periodic pension cost. Refer to note 18, “Retirement-Related Benefits,” for additional information.

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Notes to Consolidated Financial Statements — (continued)
(Dollars in millions)Before Tax
Amount		Tax (Expense)/
Benefit		Net of Tax
Amount
For the nine months ended September 30, 2024:
Other comprehensive income/(loss):   
Foreign currency translation adjustments$(273)$49 $(224)
Net changes related to available-for-sale securities:   
Unrealized gains/(losses) arising during the period$1 $0 $1 
Reclassification of (gains)/losses to other (income) and expense— — — 
Total net changes related to available-for-sale securities$1 $0 $1 
Unrealized gains/(losses) on cash flow hedges:   
Unrealized gains/(losses) arising during the period$64 $(18)$46 
Reclassification of (gains)/losses to:
   
Cost of services(19)5 (14)
Cost of sales(30)10 (20)
Cost of financing5 (1)4 
SG&A expense(10)3 (7)
Other (income) and expense(176)44 (132)
Interest expense24 (6)18 
Total unrealized gains/(losses) on cash flow hedges$(142)$37 $(105)
Retirement-related benefit plans: (1)
   
Prior service costs/(credits)$— $— $— 
Net (losses)/gains arising during the period101 (23)78 
Curtailments and settlements2,731 (687)2,044 
Amortization of prior service costs/(credits)(5)1 (4)
Amortization of net (gains)/losses765 (212)554 
Total retirement-related benefit plans$3,592 $(921)$2,672 
Other comprehensive income/(loss)$3,178 $(835)$2,343 
(1)These AOCI components are included in the computation of net periodic pension cost and include the impact of a one-time, non-cash pension settlement charge of $2.7 billion ($2.0 billion net of tax) in the third quarter of 2024. Refer to note 18, “Retirement-Related Benefits,” for additional information.

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Notes to Consolidated Financial Statements — (continued)
Reclassifications and Taxes Related to Items of Other Comprehensive Income
(Dollars in millions)Before Tax
Amount		Tax (Expense)/
Benefit		Net of Tax
Amount
For the nine months ended September 30, 2023:
Other comprehensive income/(loss):   
Foreign currency translation adjustments$180 $(142)$39 
Net changes related to available-for-sale securities:   
Unrealized gains/(losses) arising during the period$(1)$0 $(1)
Reclassification of (gains)/losses to other (income) and expense— — — 
Total net changes related to available-for-sale securities$(1)$0 $(1)
Unrealized gains/(losses) on cash flow hedges:   
Unrealized gains/(losses) arising during the period$279 $(77)$203 
Reclassification of (gains)/losses to:   
Cost of services6 (1)5 
Cost of sales(12)4 (8)
Cost of financing12 (3)9 
SG&A expense(7)2 (4)
Other (income) and expense(6)1 (4)
Interest expense57 (14)43 
Total unrealized gains/(losses) on cash flow hedges$330 $(87)$243 
Retirement-related benefit plans: (1)
   
Prior service costs/(credits)$— $1 $1 
Net (losses)/gains arising during the period104 (19)85 
Curtailments and settlements7 (2)5 
Amortization of prior service costs/(credits)(6)2 (5)
Amortization of net (gains)/losses389 (113)276 
Total retirement-related benefit plans$494 $(132)$361 
Other comprehensive income/(loss)$1,003 $(361)$642 
(1)These AOCI components are included in the computation of net periodic pension cost. Refer to note 18, “Retirement-Related Benefits,” for additional information.
Accumulated Other Comprehensive Income/(Loss) (net of tax)
(Dollars in millions)Net Unrealized
Gains/(Losses)
on Cash Flow
Hedges
Foreign
Currency
Translation
Adjustments (1)
Net Change
Retirement-
Related
Benefit
Plans		Net Unrealized
Gains/(Losses)
on Available-
For-Sale
Securities		Accumulated
Other
Comprehensive
Income/ (Loss)
January 1, 2024$(106)$(3,488)$(15,165)$(1)$(18,761)
Other comprehensive income before reclassifications46 (224)78 1 (100)
Amount reclassified from accumulated other comprehensive income (2)
(151)— 2,594 — 2,443 
Total change for the period$(105)$(224)$2,672 $1 $2,343 
September 30, 2024$(211)$(3,713)$(12,493)$(1)$(16,418)
(1)Foreign currency translation adjustments are presented gross except for any associated hedges which are presented net of tax.
(2)Net change in retirement-related benefit plans includes the impact of a one-time, non-cash, pre-tax pension settlement charge of $2.7 billion ($2.0 billion net of tax) in the third quarter of 2024. Refer to note 18, "Retirement-Related Benefits," for additional information.
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Notes to Consolidated Financial Statements — (continued)
(Dollars in millions)Net Unrealized
Gains/(Losses)
on Cash Flow
Hedges
Foreign
Currency
Translation
Adjustments (1)
Net Change
Retirement-
Related
Benefit
Plans		Net Unrealized
Gains/(Losses)
on Available-
For-Sale
Securities		Accumulated
Other
Comprehensive
Income/ (Loss)
January 1, 2023$(135)$(3,591)$(13,013)$(1)$(16,740)
Other comprehensive income before reclassifications203 39 86 (1)326 
Amount reclassified from accumulated other comprehensive income40 — 276 — 316 
Total change for the period$243 $39 $361 $(1)$642 
September 30, 2023$109 $(3,552)$(12,652)$(2)$(16,098)
(1)Foreign currency translation adjustments are presented gross except for any associated hedges which are presented net of tax.
16. Derivative Financial Instruments:
The company operates in multiple functional currencies and is a significant lender and borrower in the global markets. In the normal course of business, the company is exposed to the impact of interest rate changes and foreign currency fluctuations, and to a lesser extent equity and commodity price changes and client credit risk. The company limits these risks by following established risk management policies and procedures, including the use of derivatives, and, where cost effective, financing with debt in the currencies in which assets are denominated. For interest rate exposures, derivatives are used to better align rate movements between the interest rates associated with the company’s lease and other financial assets and the interest rates associated with its financing debt. Derivatives are also used to manage the related cost of debt. For foreign currency exposures, derivatives are used to better manage the cash flow volatility arising from foreign exchange rate fluctuations.
In the Consolidated Balance Sheet, the company does not offset derivative assets against liabilities in master netting arrangements nor does it offset receivables or payables recognized upon payment or receipt of cash collateral against the fair values of the related derivative instruments. At September 30, 2024 and December 31, 2023, the amount recognized in other accounts receivables for the right to reclaim cash collateral was $5 million and $11 million, respectively. At September 30, 2024, there was no amount recognized in accounts payable for the obligation to return cash collateral. At December 31, 2023, the amount recognized in accounts payable for such obligation was $7 million. The company restricts the use of cash collateral received to rehypothecation, and therefore reports it in restricted cash in the Consolidated Balance Sheet. There was no cash collateral rehypothecated at September 30, 2024. At December 31, 2023, the amount rehypothecated was $7 million. Additionally, if derivative exposures covered by a qualifying master netting agreement had been netted in the Consolidated Balance Sheet at September 30, 2024 and December 31, 2023, the total derivative asset and liability positions each would have been reduced by $94 million and $235 million, respectively.
As discussed in note 5, “Acquisitions & Divestitures,” the company completed the acquisition of StreamSets and webMethods from Software AG on July 1, 2024. In December 2023, in connection with the announcement of the acquisition, the company entered into foreign exchange call option contracts (the call options) with a total notional amount of $2.3 billion (€2.13 billion) and a total premium paid of $49 million. The call options were accounted for as non-hedge derivatives and expired on June 18, 2024 with no economic value. From June 18, 2024 to June 28, 2024, the company replaced the majority of the options with foreign currency forward contracts with notional values of $1.8 billion to cover the economic exposure. For the nine months ended September 30, 2024, the company recorded a realized loss of $68 million in other (income) and expense in the Consolidated Income Statement. At December 31, 2023, the fair value of the call options was $62 million, and was included in prepaid expenses and other current assets in the Consolidated Balance Sheet. There were no associated derivatives outstanding at September 30, 2024.
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.
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Notes to Consolidated Financial Statements — (continued)
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 both September 30, 2024 and December 31, 2023, the total notional amount of the company’s interest-rate swaps was $6.7 billion. The weighted-average remaining maturity of these instruments at September 30, 2024 and December 31, 2023 was approximately 4.7 years and 5.5 years, respectively. These interest-rate contracts were accounted for as fair value hedges. The company did not have any cash flow hedges relating to this program outstanding at September 30, 2024 and December 31, 2023.
Forecasted Debt Issuance
The company is exposed to interest rate volatility on future debt issuances. To manage this risk, the company may use instruments such as forward starting interest-rate swaps to lock in the rate on the interest payments related to the forecasted debt issuances. There were no instruments outstanding at September 30, 2024 and December 31, 2023.
In connection with cash flow hedges of forecasted interest payments related to the company's borrowings, the company recorded net losses (before taxes) of $110 million and $121 million at September 30, 2024 and December 31, 2023, respectively, in AOCI. The company estimates that $14 million of the deferred net losses (before taxes) on derivatives in AOCI at September 30, 2024 will be reclassified to net income within the next 12 months, providing an offsetting economic impact against the underlying interest payments.
Foreign Exchange Risk
Long-Term Investments in Foreign Subsidiaries (Net Investment)
A large portion of the company’s foreign currency denominated debt portfolio is designated as a hedge of net investment in major foreign subsidiaries to reduce the volatility in stockholders’ equity caused by changes in foreign currency exchange rates in the subsidiaries' functional currency with respect to the U.S. dollar. At September 30, 2024 and December 31, 2023, the carrying value of debt designated as hedging instruments was $15.1 billion and $15.9 billion, respectively. The company also uses foreign currency derivatives, such as forward contracts and long-term cross currency swaps, for this risk management purpose. In the third quarter of 2024, the company entered into long-term cross currency swaps designated as hedge of net investment instruments with a $2.2 billion notional value that the company also relates to its U.S. dollar denominated debt. The interim net interest cash settlements of these swaps will be included as cash flows from operating activities in the Consolidated Statement of Cash Flows. There were no net interest settlements during the three months ended September 30, 2024. At September 30, 2024 and December 31, 2023, the total notional amount of derivative instruments designated as net investment hedges was $6.9 billion and $4.9 billion, respectively. At September 30, 2024 and December 31, 2023, the weighted-average remaining maturity of these instruments was approximately 0.8 years and 0.1 years, respectively.
In conjunction with the company entering into long-term cross currency swaps as described above, the company records unrealized gains and losses on the excluded component of net investment hedging derivatives in other comprehensive income (loss) and recognizes the excluded component on a straight-line basis over the life of the hedge in interest expense and cost of financing in the Consolidated Income Statement.
Anticipated Royalties and Cost Transactions
The company’s operations generate significant nonfunctional currency, third-party vendor payments and intercompany payments for royalties and goods and services among the company’s non-U.S. subsidiaries and with the company. In anticipation of these foreign currency cash flows and in view of the volatility of the currency markets, the company selectively employs foreign exchange forward contracts to manage its currency risk. These forward contracts are accounted for as cash flow hedges. At September 30, 2024, the maximum remaining length of time over which the company hedged its exposure is approximately two years. At September 30, 2024 and December 31, 2023, the total notional amount of
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Notes to Consolidated Financial Statements — (continued)
forward contracts designated as cash flow hedges of forecasted royalty and cost transactions was $9.8 billion and $9.2 billion, respectively. At September 30, 2024 and December 31, 2023, the weighted-average remaining maturity of these instruments was approximately 0.5 years and 0.6 years, respectively.
At September 30, 2024 and December 31, 2023, in connection with cash flow hedges of anticipated royalties and cost transactions, the company recorded net losses (before taxes) of $105 million and net gains (before taxes) of $40 million, respectively, in AOCI. The company estimates that $160 million of deferred net losses (before taxes) on derivatives in AOCI at September 30, 2024 will be reclassified to net income within the next 12 months, providing an offsetting economic impact against the underlying anticipated transactions.
Foreign Currency Denominated Borrowings
The company is exposed to exchange rate volatility on foreign currency denominated debt. To manage this risk, the company may employ forward contracts or cross-currency swaps to convert the principal, or principal and interest payments of foreign currency denominated debt, to debt denominated in the functional currency of the borrowing entity. These derivatives are accounted for as cash flow hedges. At September 30, 2024, the maximum length of time remaining over which the company hedged its exposure was approximately six years. At September 30, 2024 and December 31, 2023, the total notional amount of derivative instruments designated as cash flow hedges of foreign-currency denominated debt was $5.0 billion and $5.2 billion respectively.
At September 30, 2024 and December 31, 2023, in connection with previously terminated cross-currency swaps, the company recorded net losses (before taxes) of $51 million and $68 million, respectively, in AOCI, of which $16 million of deferred net losses (before taxes) is estimated to be reclassified to net income within the next 12 months.
At September 30, 2024 and December 31, 2023, in connection with forward contracts, the company has recorded net losses (before taxes) of $4 million and net gains (before taxes) of $23 million, respectively, in AOCI. Approximately $63 million of losses (before taxes) related to the initial forward points excluded from the assessment of hedge effectiveness is expected to be amortized to other (income) and expense within the next 12 months.
Subsidiary Cash and Foreign Currency Asset/Liability Management
The company uses its Global Treasury Centers to manage the cash of its subsidiaries. These centers principally use currency swaps to convert cash flows in a cost-effective manner. In addition, the company uses forward contracts to economically hedge, on a net basis, the foreign currency exposure of a portion of the company’s nonfunctional currency assets and liabilities. The terms of these forward and swap contracts are generally less than one year. The changes in the fair values of these contracts and of the underlying hedged exposures are generally offsetting and are recorded in other (income) and expense in the Consolidated Income Statement. At September 30, 2024 and December 31, 2023, the total notional amount of derivative instruments in economic hedges of foreign currency exposure was $5.7 billion and $6.7 billion, respectively.
Equity Risk Management
The company is exposed to market price changes in certain broad market indices and in the company’s own stock primarily related to certain obligations to employees. Changes in the overall value of these employee compensation obligations are recorded in SG&A expense in the Consolidated Income Statement. Although not designated as accounting hedges, the company utilizes derivatives, including equity swaps and futures, to economically hedge the exposures related to its employee compensation obligations. The derivatives are linked to the total return on certain broad market indices or the total return on the company’s common stock, and are recorded at fair value with gains or losses also reported in SG&A expense in the Consolidated Income Statement. At September 30, 2024 and December 31, 2023, the total notional amount of derivative instruments in economic hedges of these compensation obligations was $1.4 billion and $1.2 billion, respectively.
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Notes to Consolidated Financial Statements — (continued)
Cumulative Basis Adjustments for Fair Value Hedges
At September 30, 2024 and December 31, 2023, the following amounts were recorded in the Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges:
(Dollars in millions)September 30,
2024		December 31,
2023
Short-term debt:  
Carrying amount of the hedged item$— $(1)
Cumulative hedging adjustments included in the carrying amount — assets/(liabilities) $— $(1)
Long-term debt:  
Carrying amount of the hedged item$(6,704)$(6,629)
Cumulative hedging adjustments included in the carrying amount — assets/(liabilities) (1)
$(19)$61 
(1)Includes ($166) million and ($200) million of hedging adjustments on discontinued hedging relationships at September 30, 2024 and December 31, 2023, respectively.
The Effect of Derivative Instruments in the Consolidated Income Statement
The total amounts of income and expense line items presented in the Consolidated Income Statement in which the effects of fair value hedges, cash flow hedges, net investment hedges and derivatives not designated as hedging instruments are recorded and the total effect of hedge activity on these income and expense line items are as follows:
(Dollars in millions)TotalGains/(Losses) of
Total Hedge Activity
For the three months ended September 30:2024202320242023
Cost of services$5,048 $5,217 $5 $(2)
Cost of sales$1,404 $1,419 $3 $(5)
Cost of financing$95 $94 $(2)$(3)
SG&A expense$4,911 $4,458 $83 $(58)
Other (income) and expense$2,244 $(215)$428 $(316)
Interest expense$429 $412 $(11)$(15)
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Notes to Consolidated Financial Statements — (continued)
Gain (Loss) Recognized in Consolidated Income Statement
(Dollars in millions)Consolidated
Income Statement
Line Item		Recognized on
Derivatives
Attributable to Risk
Being Hedged (2)
For the three months ended September 30:2024202320242023
Derivative instruments in fair value hedges: (1)
     
Interest rate contractsCost of financing$31 $(33)$(37)$28 
Interest expense155 (166)(185)139 
Derivative instruments not designated as hedging instruments: 
Foreign exchange contractsOther (income) and expense194 (141) N/A  N/A
Equity contractsSG&A expense83 (54) N/A  N/A
Total $463 $(394)$(222)$167 
Gain (Loss) Recognized in Consolidated Income Statement and Other Comprehensive Income
Recognized in OCIConsolidated
Income Statement
Line Item		Reclassified
from AOCI
Amounts Excluded from
Effectiveness Testing (3)
(Dollars in millions)
For the three months ended September 30:202420232024202320242023
Derivative instruments in cash flow hedges:       
Interest rate contracts$— $— Cost of financing$(1)$(1)$— $— 
Interest expense(3)(4)— — 
Foreign exchange contractsCost of services5 (2)— — 
Amount included in the assessment of effectiveness(153)101 Cost of sales3 (5)— — 
Amount excluded from the assessment of effectiveness(62)29 Cost of financing(1)(2)— — 
SG&A expense0 (4)— — 
Other (income) and expense255 (164)(20)(11)
Interest expense(5)(11)— — 
Instruments in net investment hedges: (4)
       
Foreign exchange contractsCost of financing— — 5 5 
Amount included in the assessment of effectiveness
(1,086)652 Interest expense— — 26 26 
Amount excluded from the assessment of effectiveness10 — 
Total$(1,290)$782  $254 $(192)$11 $21 
(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)Amounts excluded from effectiveness testing for both net investment hedges and cash flow hedges of foreign currency debt are amortized to net income on a straight-line basis over the life of the relevant hedging instrument.
(4)Instruments in net investment hedges include derivative and non-derivative instruments with the amounts recognized in OCI providing an offset to the translation of foreign subsidiaries.
N/A - not applicable


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Notes to Consolidated Financial Statements — (continued)
(Dollars in millions)TotalGains/(Losses) of
Total Hedge Activity
For the nine months ended September 30:2024202320242023
Cost of services$15,414 $15,821 $19 $(6)
Cost of sales$4,393 $4,329 $30 $12 
Cost of financing$281 $297 $(9)$(10)
SG&A expense$14,823 $14,212 $168 $44 
Other (income) and expense$1,694 $(721)$1 $(315)
Interest expense$1,288 $1,202 $(45)$(46)
Gain (Loss) Recognized in Consolidated Income Statement
(Dollars in millions)Consolidated
Income Statement
Line Item		Recognized on
Derivatives
Attributable to Risk
Being Hedged (2)
For the nine months ended September 30:2024202320242023
Derivative instruments in fair value hedges: (1)
     
Interest rate contractsCost of financing$(5)$(55)$(13)$42 
Interest expense(24)(261)(66)196 
Derivative instruments not designated as hedging instruments:     
Foreign exchange contractsOther (income) and expense(174)(321) N/A  N/A
Equity contractsSG&A expense158 37  N/A  N/A
Total $(46)$(600)$(79)$238 
Gain (Loss) Recognized in Consolidated Income Statement and Other Comprehensive Income
Recognized in OCIConsolidated
Income Statement
Line Item		Reclassified
from AOCI
Amounts Excluded from
Effectiveness Testing (3)
(Dollars in millions)
For the nine months ended September 30:202420232024202320242023
Derivative instruments in cash flow hedges:       
Interest rate contracts$— $— Cost of financing$(2)$(2)$— $— 
Interest expense(10)(11)— — 
Foreign exchange contractsCost of services19 (6)— — 
Amount included in the assessment of effectiveness147 250 Cost of sales30 12 — — 
Amount excluded from the assessment of effectiveness(84)29 Cost of financing(3)(10)— — 
SG&A expense10 7 — — 
Other (income) and expense233 16 (57)(11)
Interest expense(15)(46)— — 
Instruments in net investment hedges: (4)
       
Foreign exchange contractsCost of financing— — 14 16 
Amount included in the assessment of effectiveness(205)564 Interest expense— — 69 75 
Amount excluded from the assessment of effectiveness10 — 
Total$(131)$843  $263 $(40)$26 $81 
(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)Amounts excluded from effectiveness testing for both net investment hedges and cash flow hedges of foreign currency debt are amortized to net income on a straight line basis over the life of the relevant hedging instrument.
(4)Instruments in net investment hedges include derivative and non-derivative instruments with the amounts recognized in OCI providing an offset to the translation of foreign subsidiaries.
N/A - not applicable
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Notes to Consolidated Financial Statements — (continued)
For the three and nine months ended September 30, 2024 and 2023, there were no material gains or losses excluded from the assessment of hedge effectiveness (for fair value or cash flow hedges), or associated with an underlying exposure that did not or was not expected to occur (for cash flow hedges); nor are there any anticipated in the normal course of business.
17. Stock-Based Compensation:
Stock-based compensation cost for stock awards and stock options is measured at grant date, based on the fair value of the award, and is recognized over the employee requisite service period. The following table presents total stock-based compensation cost included in income from continuing operations.
Three Months Ended September 30,Nine Months Ended September 30,
(Dollars in millions)2024202320242023
Cost$56 $48 $165 $141 
Selling, general and administrative167 148 511 465 
Research, development and engineering107 91 290 237 
Pre-tax stock-based compensation cost$330 $286 $966 $843 
Income tax benefits(131)(74)(353)(216)
Total net stock-based compensation cost$199 $213 $613 $627 
Pre-tax stock-based compensation cost for the three months ended September 30, 2024 increased $44 million compared to the corresponding period in the prior year due to increases in restricted stock units ($31 million), stock options ($6 million), performance share units ($4 million) and Employees Stock Purchase Plan (ESPP) ($3 million). The increases are primarily driven by stock-based compensation awards granted by the company as part of its annual cycles for executives and other employees.
Pre-tax stock-based compensation cost for the nine months ended September 30, 2024 increased $123 million compared to the corresponding period in the prior year due to increases in restricted stock units ($73 million), performance share units ($25 million), stock options ($19 million) and ESPP ($7 million). The increases are primarily driven by stock-based compensation awards granted by the company as part of its annual cycles for executives and other employees.
Total unrecognized compensation cost related to non-vested awards at September 30, 2024 was $1.8 billion and is expected to be recognized over a weighted-average period of approximately 2.6 years.
18. Retirement-Related Benefits:
The company offers defined benefit (DB) pension plans, defined contribution plans, as well as nonpension postretirement plans primarily consisting of retiree medical benefits.
IBM U.S. Retirement Plan Changes
Effective January 1, 2024, IBM changed how it provides certain retirement-related benefits in the U.S. IBM is providing a new benefit to most U.S. employees under its existing Qualified PPP called the Retirement Benefit Account (RBA). This is in place of any IBM contributions to the U.S. employees' 401(k) Plus accounts. IBM U.S. regular full-time and part-time employees with at least one year of service will participate in the RBA. Each eligible employee's RBA is credited monthly with an amount equal to five percent of their eligible pay with no employee contribution required. Under the RBA, eligible employees earn six percent interest through 2026 and starting in 2027, will earn interest equal to the 10-year U.S. Treasury Yield, subject to a three percent minimum per year through 2033. Eligible employees also received a salary increase effective January 1, 2024 for the difference between the IBM 401(k) Plus contribution percent they were previously entitled to receive and the five percent RBA pay credit. Since the RBA is a component of the Qualified PPP, it is funded by the trust for the Qualified PPP along with all other benefits in the Qualified PPP.
As a result of this change, inactive pension plan participants no longer represent substantially all of the participants in the Qualified PPP. As required by U.S. GAAP, this changed the amortization period of unrecognized actuarial losses from the average remaining life expectancy of inactive plan participants to the average remaining service period of active plan
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Notes to Consolidated Financial Statements — (continued)
participants in 2024. Recognized actuarial losses for the U.S. Plans increased by approximately $100 million and $300 million for the three and nine months ended September 30, 2024, respectively, as compared to the prior-year periods, primarily driven by the change in amortization period. There was no impact to funded status, retiree benefit payments or funding requirements of the Qualified PPP due to the change in amortization period.
Over the past several years, the company has taken actions to reduce the risk profile of its worldwide retirement-related plans, while at the same time increasing the funded status of the plans. As described in note 1, "Basis of Presentation," in September 2024, the Qualified PPP irrevocably transferred to the Insurer approximately $6 billion of the Qualified PPP's defined benefit pension obligations and related plan assets, thereby reducing the company's pension obligations and assets by the same amount. This transaction further de-risks the company's retirement-related plans by eliminating the potential for the company to make future cash contributions to fund this portion of pension obligations being transferred to the Insurer. After the transaction, the Qualified PPP remained in an overfunded position as of September 30, 2024.
Upon issuance of the group annuity contract, the Qualified PPP's benefit obligations and administration for approximately 32,000 of the company's Plan participants and beneficiaries (the "Transferred Participants") were transferred to the Insurer. Under the group annuity contract, the Insurer has made an irrevocable commitment, and will be solely responsible, to pay the pension benefits of each Transferred Participant that are due on or after January 1, 2025. The transaction resulted in no changes to the amount of benefits payable to the Transferred Participants. The company recognized a one-time, non-cash, pre-tax pension settlement charge of $2.7 billion ($2.0 billion net of tax) in the third quarter of 2024 primarily related to the accelerated recognition of actuarial losses included within AOCI in the Consolidated Statement of Equity. As a result of this transaction, the company was required to remeasure the benefit obligations and plan assets of the Qualified PPP. The remeasurement reflects the use of the current discount rate and actual return on plan assets as of August 31, 2024, applying the practical expedient to remeasure plan assets and obligations as of the nearest calendar month-end date.
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Notes to Consolidated Financial Statements — (continued)
The following table presents the changes in benefit obligations and plan assets of the company's retirement-related benefit plans affected by the interim remeasurements described above for the nine months ended September 30, 2024.
Qualified PPP
(Dollars in millions)U.S. Plan
Change in benefit obligation:
Benefit obligation at January 1, 2024
$19,854 
Service cost295 
Interest cost686 
Plan participants' contributions— 
Actuarial losses/(gains) (1)
46 
Benefits paid from trust(1,073)
Direct benefit payments— 
Amendments/curtailments/settlements/other (2)
(6,229)
Benefit obligation at September 30, 2024
$13,578 
Change in plan assets:
Fair value of plan assets at January 1, 2024
$24,437 
Actual return of plan assets (1)
1,140 
Employer contributions— 
Plan participants' contributions— 
Benefits paid from trust(1,073)
Direct benefit payments— 
Amendments/curtailments/settlements/other (2)
(6,229)
Fair value of plan assets at September 30, 2024
$18,275 
Funded status at September 30, 2024
$4,697 
Accumulated benefit obligation (3)
$13,578 
(1)Reflects a 5.00 percent discount rate at both December 31, 2023 and at the remeasurement date.
(2)Primarily represents the transfer of pension obligations and related plan assets to the Insurer pursuant to a group annuity contract and lump sum payments to Transferred Participants.
(3)Represents the benefit obligation assuming no future participant compensation increases.
IBM Non-U.S. Retirement Plan Change
In the fourth quarter of 2024, IBM Canada Ltd. (“IBMC”) purchased two separate nonparticipating single premium group annuity contracts from RBC Life Insurance Company and Brookfield Annuity Company (collectively the "Insurers") that will transfer to the Insurers approximately $1.2 billion of the IBMC IBM Retirement Plan’s (the “Plan”) defined benefit pension obligations for approximately 6,000 Plan participants and beneficiaries. The purchase of the group annuity contracts was completed October 29, 2024 and was funded directly by assets of the Plan and required no cash contribution from IBM. As a result of the transaction, the company expects to recognize a one-time, non-cash, pre-tax, pension settlement charge of approximately $0.4 billion in the fourth quarter of 2024. The actual charge will depend on finalization of the actuarial and other assumptions.

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Notes to Consolidated Financial Statements — (continued)
The following tables provide the pre-tax cost for all retirement-related plans.
Yr.-to-Yr.
(Dollars in millions)Percent
For the three months ended September 30:20242023Change
Retirement-related plans — cost:   
Defined benefit pension and defined contribution plans — cost (1)
$3,024 $250 nm 
Nonpension postretirement plans — cost30 33 (9.4)%
Total$3,053 $283 nm 
Yr.-to-Yr.
(Dollars in millions)Percent
For the nine months ended September 30:20242023Change
Retirement-related plans — cost:   
Defined benefit pension and defined contribution plans — cost (1)
$3,667 $791 nm 
Nonpension postretirement plans — cost90 98 (7.8)%
Total$3,757 $888 nm 
(1)2024 includes the impact of a one-time, non-cash, pre-tax pension settlement charge of $2.7 billion related to the Qualified PPP, as described above.
nm - not meaningful

Cost/(Income) of Retirement Plans

The following tables provide the components of the cost/(income) for the company’s retirement-related benefit plans.
(金额单位：百万美元)美国计划非美国计划
截至9月30日结束的三个月：2024 202320242023
服务费用 (1)
$98 $— $43 $44 
利息成本 (2)
228 272 271 293 
计划资产预期回报(2)
(313)(382)(395)(363)
往前期服务成本摊销/(贷款) (2)
— — 6 5 
确认的精算损失 (2)
113 27 131 99 
缩短和解算 (2) (3)
2,725 — 2 2 
多雇主计划— — 3 4 
其他成本/贷项 (2)
— — 0 3 
定义利益计划总净周期性养老金(收入)/成本 $2,851 $(82)$62 $88 
定义贡献计划成本 15 150 95 95 
在综合利润表中确认的总体定义利益养老金和定义贡献计划成本 $2,866 $68 $158 $182 
(1)2024年美国计划服务费用的增加是由于上述2024年1月1日生效的符合PPP计划变更。
(2)净周期性养老金成本的这些组成部分包含在合并利润表的其他收益和费用中。
(3)2024年的美国计划反映了一次性、非现金、税前的养老金结算费用，与上述合格PPP相关。
48
目录
综合财务报表附注 — （续）
(金额单位：百万美元)美国计划非美国计划
截至9月30日止九个月：2024 202320242023
服务费用 (1)
$295 $— $128 $133 
利息成本 (2)
735 817 803 873 
计划资产预期回报(2)
(994)(1,146)(1,168)(1,081)
先前的服务成本摊销/(贷项) (2)
— 0 17 15 
已确认的精算损失 (2)
370 82 389 302 
缩减和协议 (2) (3)
2,725 — 7 7 
多雇主计划— — 10 10 
其他费用/(贷项) (2)
— — 20 21 
定义利益计划的总净期间性养老金(收入)/费用$3,131 $(247)$206 $281 
定义供款计划成本42 473 288 283 
在合并利润表中确认的总的定义利益养老金和定义供款计划成本$3,173 $226 $494 $565 
(1)2024年美国计划服务费用的增加是由于上述2024年1月1日生效的符合PPP计划变更。
(2)这些养老金净周期费用的元件包括在合并利润表的其他收入和费用中。
(3)2024年的美国计划反映了一次性、非现金、税前的养老金结算费用，与上述合格PPP相关。
非养老户后离退休计划成本
以下表格提供了公司非养老金后离退休计划成本的元件。
(金额单位：百万美元)美国计划非美国计划
截至9月30日止三个月：2024202320242023
服务成本$1 $1 $1 $1 
利息成本 (1)
27 29 10 10 
计划资产预期回报(1)
— — 0 (1)
往前期服务成本摊销/(记入)贷项 (1)
(7)(7)0 0 
承认的精算损失 (1)
— — 0 0 
缩减和解决 (1)
— — — — 
共同财务报表中确认的总非退休后离职计划成本 $20 $23 $10 $10 

(金额单位：百万美元)美国计划非美国计划
截至9月30日结束的九个月：2024202320242023
服务成本$2 $3 $2 $2 
利息成本 (1)
80 88 31 29 
计划资产预期回报(1)
— — (1)(2)
往期服务成本的摊销/(赊欠) (1)
(22)(22)0 0 
确认的精算亏损 (1)
— — (1)(1)
减少和解决 (1)
— — — — 
在合并利润表中确认的非退休后福利计划总成本$59 $69 $30 $28 
(1)净周期性养老金成本的这些元件包括在合并利润表中的其他收益和费用中。
49
目录
综合财务报表附注 — （续）
计划贡献
公司预计2024年计划捐款金额与2023年年度报告中披露的金额不会有重大变化。 下表包括以下计划的捐款：
(金额单位：百万美元)计划捐款
截至9月30日的九个月：20242023
美国非养老后离退退休福利计划
$155 $188 
非美国Db和多雇主计划 (1)
53 45 
总计划捐款$208 $233 
(1)报告金额已扣除退款。
上表中美国的非养老后离职福利计划捐款是通过美国国债进行资助的。此外，在2024年和2023年截至9月30日的九个月内，公司分别向活跃的医疗信托基金捐款$600万美元和537 美国国债资助。 使用美国国债进行的捐款被视为非现金交易。
19. 后续事件:
2024年10月30日，公司宣布董事会批准每股的季度股息为$1.67 。该股息将于2024年12月10日支付给截至2024年11月12日持股的股东。

50
目录
事项二
管理层讨论与分析
经营业绩和财务状况结果
2024年9月30日结束的三个月和九个月
快照
信息组织：
2024年第一季度，我们对组织结构和管理系统进行了调整，以更好地使我们的投资组合与市场保持一致，增加透明度并提高与同行的业务部门可比性。这些变化对我们的综合财务报表没有影响，但对我们可报告的板块有影响。所有时段都按可比基础报告这些板块。此外，由于移除了某些板块盈利构成部分，我们还将绩效指标的标题从持续经营前税收利润更新为板块利润。参阅附注4“板块”以获取有关我们可报告的板块的额外信息。
2024年9月，IBm合格个人养老金计划（合格PPP）从美国保诚保险公司（保险公司）购买了一份非参与型单一保费团体年金合同，并将合格PPP的约60亿美元的确定责任养老金义务和相关计划资产无法撤销地转移给了保险公司，从而减少了我们的养老金义务和资产相同的金额。该团体年金合同是使用合格PPP的资产购买的，公司不需要进行额外的资金捐款。由于这笔交易，我们在2024年第三季度确认了一次性的、非营运的、非现金的、税前养老金结算费用27亿美元（税后20亿美元），主要与加速确认合格PPP累积精算损失有关。由于该费用是非营运和非现金的，它并没有影响我们的营运（非GAAP）收益或现金流量结果。有关更多信息，请参阅附注18“与养老金相关的福利”。
在所呈现的表格中，由于使用舍入数以披露为目的，某些列和行的总和可能不符合。所呈现的百分比是根据基础整元金额计算的。某些往年金额已重新分类以符合当前期间的展示方式。适用情况下已做注释。
货币:
管理层讨论中提到的“按货币调整”或“按恒定货币”并不包括操作影响可能导致的外币汇率波动。当我们提到恒定货币的增长率或调整此类增长率以考虑货币因素时，是为了让某些财务结果在没有外币汇率波动影响的情况下进行查看，从而促进对其业务绩效的季度比较。根据货币调整的财务结果是通过使用可比年度期间的汇率将当前期活动以本地货币进行折算得出的。这种方法适用于本币为当地货币的国家。一般来说，当美元对其他货币的升值或贬值时，按恒定货币汇率或货币调整的增长率会高于或低于根据实际汇率报告的增长率。有关更多信息，请参阅“货币汇率波动”。
经营（非通用会计准则）盈利：
为了更好地透明化业务的运营结果，此外，管理层将业务结果分为经营和非经营类别。经营收益来自持续经营业务的非GAAP度量指标，不包括特定收购相关费用、无形资产摊销、因权益法投资基础差异产生的费用、与养老相关的成本及其相关税收影响。由于美国减税与就业法案（美国税改）的颁布具有独特且非经常性的特点，管理层将2017年第四季度记录的一次性暂定费用及对该费用的调整归类为非经营性质。调整主要包括调整、会计选择以及影响已记录一次性费用的监管、法律或审计调整的变化。对于收购而言，经营（非GAAP）收益不包括购买的无形资产摊销以及相关收购费用，如正在进行的研究与开发、交易费用、相应留任、重组以及相关开支、与收购整合有关的税收费用以及与前期结算相关的费用，如融资成本。这些费用被排除在外，因为它们的数额和时间上可能与各期不一致，并且受到我们收购的规模、类型和频率显著影响。鉴于其独特且暂时性质，管理团队还将标记至市场价的影响归类为非经营性支出。
51
目录
管理层讨论 -（续）
在从SoftwareAG收购StreamSets和webMethods之前进入的外汇衍生合同是为了经济上对冲与此收购的购买价格相关的外币波动风险。这些衍生合同在2024年6月28日到期。这一影响记录在合并利润表的其他（收入）和费用中，并反映了这些衍生合同公平价值变化造成的实现损失。对于已收购公司的所有其他支出，均包括在持续经营的收入和运营（非GAAP）收入中。对于与退休相关的费用，管理层将某些项目划分为运营性质，将其他项目划分为非运营性质，符合GAAP。我们将确定福利计划和非养老福利计划服务成本、多雇主计划成本以及定义的贡献计划成本纳入经营收入。非运营性质的与退休相关的费用包括确定福利计划和非养老福利计划的以前服务成本摊销、利息费用、计划资产预期回报、摊销的精算增益/损失、任何计划的收缩/结清对业绩的影响，包括2024年第三季度将筹资保护计划（PPP）一部分的定义福利养老金义务及相关计划资产转移给保险公司导致的一次性、非现金、税前结算费27亿美元（经过税后折算后净额20亿美元）；养老金破产成本和其他成本。非运营性质的与退休相关的费用主要与养老金计划资产和负债变化有关，这些变化与财务市场表现相关，我们认为这些成本属于业务的运营绩效范畴之外。
总体而言，管理层认为，如上所述补充性地为投资者提供营运盈利的视角，将增加业务运营结果和养老金计划绩效的透明度和清晰度；提升管理层决策和其对运营绩效影响的可见性；使得与同行公司更好地进行比较；并允许我们提供对未来业务的长期战略视角。此外，这些非GAAP措施提供了一种与投资者和分析师常常关注的领域保持一致的观点。我们的报告分部财务结果反映了来自持续运营的税前营运盈利，与我们的管理和计量系统一致。

财务业绩摘要-截至9月30日的三个月
(金额和股数以百万计，除每股金额外)同比
百分比/
利润率
变更
截至9月30日结束的三个月：20242023
营业收入(1)
$14,968 $14,752 1.5 %   
毛利润率56.3 %54.4 %1.9 点
总支出和其他(收入)$9,222 $6,150 50.0 %   
持续经营活动税前营业利润/(亏损) $(802)$1,873 无量纲
持续经营活动所得税负债/(受益)$(485)$159 无量纲
持续经营活动利润/(亏损) $(317)$1,714 无量纲
持续经营业务利润（亏损）率 (2.1)%11.6 %(13.7)点
来自终止经营的收入税后$(13)$(10)29.4 %   
净利润 (2)
$(330)$1,704 无量纲
每股持续经营业务收益（亏损）- 假定稀释情况 (2)
$(0.34)$1.86 无量纲
每股摊薄合并收益/(亏损) (2)
$(0.36)$1.84 无量纲
每股摊薄加权平均股量 - 假设发行923.6 923.7 0.0 %   
(1)按货币调整，年度营业收入增长1.6%。
(2)包括一次性的、非现金的、税前养老金解决费用27亿美元（税后20亿美元），导致每股摊薄收益/(亏损)和持续经营业务的合并摊薄收益/(亏损)分别受到2.18美元的影响。有关更多信息，请参阅附注18，“养老相关福利”
不重要

52
目录
管理层讨论 -（续）
以下表格列出了公司2024年第三季度和2023年的营运（非通用会计准则）收益。
（除每股数据外，单位为百万美元）年度对比。
百分比
变更
截至9月30日结束的三个月：20242023
净利润/亏损如所报告 (1)
$(330)$1,704 无量纲
来自终止经营的收入税后(13)(10)29.4 %
持续经营业务的收入/损失 (1)
$(317)$1,714 无量纲
非经营调整（税后净额）：   
与收购相关的费用$373 $340 9.9 %
非经营性养老相关成本/收益 (1)
2,097 1 无量纲
美国税改影响2 (24)无量纲
营运（非通用会计准则）收益 (2)
$2,155 $2,031 6.1 %
每股摊薄营运（非通用会计准则）收益 (2)
$2.30 $2.20 4.5 %
(1)包括一次性非现金养老金结算费用20亿美元税后。
(2)请参考第一页进行净利润与FFO普通股股东可用收益的调解。 85 有关将净利润调节至营业收入的详细对账，请参考。
不重要
宏观经济环境:
我们的业务组合使我们能够在复杂的宏观经济时期抓住市场机遇。我们在地理、行业、客户和业务组合方面的多样化，以及我们的经常性营业收入基础为营业收入、利润和现金生成提供了一定的稳定性。客户和合作伙伴继续利用技术让业务扩展规模，提高效率，促进增长并获得竞争优势。由地缘政治问题、即将举行的选举以及利率期货和通胀形势变化等临时因素导致的经济不确定性，正在促使客户控制他们的自由支出，这已经对我们咨询业务的某些领域产生影响。咨询市场依然充满活力，客户和合作伙伴正为人工智能做准备，市场前景十分广阔。
2024年前九个月，全球货币的波动继续影响了我们报告的年度营业收入和利润。我们执行对冲计划，延迟了货币的影响，但并未消除。这些对冲计划带来的收益/损失主要体现在其他收入和支出中。更多信息请参阅“货币汇率波动”。
财务业绩摘要 — 截至9月30日止三个月：
2024年第三季度，我们报告营业收入为150亿美元，持续经营活动净损失为3亿美元，其中包括一次性、非现金、税前养老金结算费用影响为27亿美元（税后20亿美元）。养老金结算费用是将合格PPP的一部分定额养老金义务和相关计划资产转移给保险公司的结果，这是我们为进一步减少全球与退休相关计划的风险配置而采取的行动。我们截至2024年9月30日三个月的经营（非GAAP）收益为22亿美元。持续经营活动稀释每股亏损为0.34美元，其中包括养老金结算费用影响2.18美元，经营（非GAAP）基础上的稀释每股盈利为2.30美元。我们从经营活动中产生了29亿美元的现金和21亿美元的自由现金流，并提供了15亿美元的股东回报分红派息。我们第三季度的表现反映了软件营收增长加速、毛利率扩大和强劲的现金生成，显示出我们混合云和人工智能策略的持续成功，以及我们多元化业务模式的实力。我们继续专注于业务的基本面，结合我们的现金生成能力，使我们能够继续在全组合中投资创新和专业知识，同时继续通过分红向股东回报价值。

总营业收入按报告增长了1.5%，按货币调整后增长了2%，与去年同期相比，由软件业务带动。软件业务的营收增长率按报告为9.7%，按货币调整后为9.6%，主要受到混合平台与解决方案和事务处理的推动，反映出我们围绕混合云、自动化、数据和事务处理的软件组合调整。混合平台与解决方案的营收按报告增长了9.8%，按货币调整后增长了9.7%，主要受到红帽、自动化和数据与人工智能的增长所带动。事务处理按报告增长了9.4%，调整后的货币增长率也是9.4%，反映出容量增长、稳定续约等因素。
53
目录
管理层讨论 -（续）
汇率，以及客户继续对我们人工智能解决方案的兴趣。咨询收入按报告减少了0.5％，但在货币调整后保持不变，因为它继续受到动态市场环境的影响，客户根据宏观经济不确定性重新调整支出重点。制造行业收入按报告降低了7.0％，按货币调整后降低了6.7％，反映了产品周期动态。
从地理角度来看，美洲的营业收入按报告增长了3.0％（按货币调整后为2.4％）。欧洲、中东、非洲的营业收入按报告增长了8.5％（按货币调整后为6.8％）。亚太地区的营业收入按报告增长了3.1％（按货币调整后为4.5％）。
毛利率为56.3%，同比增长1.9个百分点，受营业收入增长、组合结构优化和持续提高生产力措施推动继续扩大。营运（非普通会计准则）毛利率为57.5%，较去年同期增加2.1个百分点，原因是同样的动态。
2024年第三季度，总支出和其他收入增长了50.0%，主要是由以上提到的27亿美元的养老金结算费用推动的，更高的劳动力再平衡费用和更高的支出反映出我们持续投资于创新组合以推动我们的策略。部分抵销了某些 QRadar saas-云计算 资产的出售所带来的收益以及我们为转变业务所采取的行动带来的生产力和效益。总运营（非GAAP）支出和其他收入同比增长了4.1%，主要是由以上所述因素推动的，不包括养老金结算费用。
2024年第三季度持续经营的税前亏损为8亿美元，而去年同期为税前收入19亿美元，税前利润率同比下降18.1个百分点至(5.4)％。2024年第三季度持续经营的所得税收益为5亿美元，而去年同期为所得税准备金20亿美元。持续经营的净亏损为3亿美元，而去年同期为净利润17亿美元，持续经营的净利润/（亏损）利润率同比下降13.7个百分点。这种年度表现主要是由传输资产负债利润合格PPP相关计划资产的一部分给保险人，导致2024年第三季度350亿美元的养老金结算费用（扣除税款后净额20亿美元）造成的。
持续经营(非GAAP)的税前收入为25亿美元，较2023年第三季度增长8.2％，持续经营(非GAAP)的税前毛利率增加1.0个百分点，主要受到我们营业收入增长和毛利率表现的推动，以及生产力和改善运营措施的好处，部分抵消了我们持续投资推动创新。第三季度2024年和2023年的持续经营(非GAAP)所得税准备均为3亿美元。持续经营(非GAAP)的净利润为22亿美元，增长了6.1％，持续经营(非GAAP)的净利润率达到14.4％，同比增加0.6个百分点。
2024年第三季度持续经营中每股摊薄亏损为0.34美元，包括2.18美元的养老金结算费用影响，相比于去年同期每股摊薄收益1.86美元。非通用会计准则下的每股摊薄收益2.30美元，较2023年第三季度增长4.5%。非通用会计准则下的每股收益是使用93840万股计算的，其中包括基于股份补偿计划和有条件可发行股份的1490万股摊薄潜在股份。由于2024年9月30日结束的三个月中出现的通用会计准则净亏损，这些潜在摊薄股份被排除在通用会计准则每股亏损计算之外，因为这种影响将具有抵消效应。有关更多信息，请参阅“普通股每股收益”第7项注释。
2024年第三季度经营活动提供的现金为29亿美元，比2023年第三季度减少2亿美元，自由现金流为21亿美元，与去年同期相比增加了4亿美元。投资活动产生的净现金流量为16亿美元，减少了40亿美元，而融资活动产生的净现金流量为28亿美元，减少了40亿美元，均与2023年第三季度相比。
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目录
管理层讨论 -（续）
财务结果摘要 — 截至9月30日的九个月：
(以百万美元和百万股为单位，除每股金额外)年度对比。
百分比/
利润率
变更
截至9月30日止九个月：20242023
营业收入(1)
$45,199 $44,479 1.6 %
毛利润率55.6 %54.0 %1.5 点
总支出和其他(收入)$22,621 $19,102 18.4 %
持续经营活动税前收入 $2,491 $4,931 (49.5)%   
持续经营活动所得税负担/(受益)$(597)$702 nm
持续经营净利润$3,088 $4,229 (27.0)%   
持续经营活动利润率 6.8 %9.5 %(2.7)点
已中止运营的业务净损益税后$21 $(15)其他
净利润(2)
$3,109 $4,214 (26.2)%   
每股收益（按摊薄计算）从持续经营中 (2)
$3.30 $4.59 (28.1)%   
合并每股收益（按摊薄计算） (2)
$3.32 $4.58 (27.5)%   
平均稀释后股份数（按摊薄计算）935.4 920.3 1.6 %
2024年9月30日2023年12月31日
资产$134,339$135,241(0.7)%   
负债$109,809$112,628(2.5)%   
股权$24,530$22,6138.5 %   
(1)按货币调整后，年同比营业收入增长2.7%。
(2)包括一次性、非现金、税前养老金解决费用27亿美元（税后20亿美元），导致每股摊薄收益/（亏损）和综合摊薄收益/（亏损）分别减少2.18美元。有关详细信息，请参阅附注18“养老相关福利”。
不重要
以下表格提供了公司2024年和2023年前9个月的营运（非常规会计准则）收益。
（除每股数据外，单位为百万美元）年度对比。
百分比
变更
截至9月30日止九个月：20242023
Net income as reported (1)
$3,109 $4,214 (26.2)%   
已中止运营的业务净损益税后21 (15)nm 
持续经营净利润(1)
$3,088 $4,229 (27.0)%   
非经营调整（税后净额）：   
与收购相关的费用$1,081 $953 13.4 %
非经营性养老相关成本/收益 (1)
2,259 11 nm
美国税改影响(434)91 nm
营运（非通用会计准则）收益 (2)
$5,994 $5,283 13.4 %
每股摊薄营运（非通用会计准则）收益 (2)
$6.41 $5.74 11.7 %
(1)包括一次性非现金养老金结算费用20亿美元税后。
(2)请参考第一页进行净利润与FFO普通股股东可用收益的调解。 86 更详细地协调净利润与营业收入。
不重要
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Management Discussion – (continued)
Financial Performance Summary —Nine Months Ended September 30:
In the first nine months of 2024, we reported $45.2 billion in revenue, net income from continuing operations of $3.1 billion, including the impact of a one-time, non cash, pre-tax pension settlement charge of $2.7 billion ($2.0 billion net of tax), and operating (non-GAAP) earnings of $6.0 billion. Diluted earnings per share from continuing operations was $3.30 as reported, including an impact of $2.18 from the pension settlement charge, and diluted earnings per share was $6.41 on an operating (non-GAAP) basis. We generated $9.1 billion in cash from operations and $6.6 billion in free cash flow, and delivered shareholder returns of $4.6 billion in dividends. Our year-to-date performance reflects our deep focus on the business fundamentals with continued revenue growth, gross profit margin expansion and strong cash generation, and a balance sheet with financial flexibility to support our business.
Total revenue grew 1.6 percent as reported and 3 percent adjusted for currency compared to the prior-year period. Software delivered revenue growth of 7.5 percent as reported and 8.0 percent adjusted for currency, with solid growth in Hybrid Platform & Solutions and Transaction Processing. Consulting revenue decreased 0.5 percent as reported but grew 1.1 percent adjusted for currency, led by strength in our Business Transformation offerings with revenue growth year to year driven by transformation projects for data, finance and supply chain. Infrastructure revenue decreased 2.3 percent as reported and 1.2 percent adjusted for currency, driven by declines in Infrastructure Support, partially offset by growth in Hybrid Infrastructure.
From a geographic perspective, Americas revenue decreased 0.4 percent year to year as reported (flat adjusted for currency). EMEA increased 3.5 percent (2.6 percent adjusted for currency). Asia Pacific increased 4.0 percent (9.8 percent adjusted for currency).
Gross margin of 55.6 percent increased 1.5 points year to year with gross profit margin expansion across all reportable segments driven by our improving portfolio mix and productivity actions. Operating (non-GAAP) gross margin of 56.7 percent increased 1.7 points compared to the prior-year period due to the same dynamics.
Total expense and other (income) increased increased 18.4 percent in the first nine months of 2024 versus the prior-year period primarily driven by the pension settlement charge of $2.7 billion described above, higher workforce rebalancing charges and higher spending reflecting our continued investment in portfolio innovation to drive our strategy. This was partially offset by a gain from the sale of certain QRadar SaaS assets, the gain on the divestiture of The Weather Company assets in the first quarter and the benefits from productivity and the actions taken to transform our operations. Total operating (non-GAAP) expense and other (income) increased 2.0 percent year to year, driven primarily by the factors described above, excluding the pension settlement charge.
Pre-tax income from continuing operations of $2.5 billion decreased 49.5 percent and pre-tax margin was 5.5 percent, a decrease of 5.6 points as compared to the first nine months of 2023. Performance in the first nine months of 2024 reflects the impact from the pension settlement charge described above partially offset by our gross margin expansion and the benefits from productivity and the actions taken to transform our operations which enabled investments to drive innovation. The continuing operations benefit from income taxes for the first nine months of 2024 was $0.6 billion, compared to a provision for income taxes of $0.7 billion for the first nine months of 2023. The current-year tax benefit was primarily driven by the resolution of certain tax audit matters in the first quarter and the pension settlement charge in the third quarter. Net income from continuing operations of $3.1 billion decreased 27.0 percent and the net income from continuing operations margin was 6.8 percent, down 2.7 points year to year.
Operating (non-GAAP) pre-tax income from continuing operations of $6.9 billion increased 12.9 percent compared to the prior-year period and the operating (non-GAAP) pre-tax margin from continuing operations increased 1.5 points to 15.3 percent. The operating (non-GAAP) provision for income taxes was $0.9 billion in both the first nine months of 2024 and the first nine months of 2023. Operating (non-GAAP) income from continuing operations of $6.0 billion increased 13.4 percent and the operating (non-GAAP) income margin from continuing operations of 13.3 percent increased 1.4 points year to year.
Diluted earnings per share from continuing operations was $3.30 for the nine months ended 2024 and included an impact of $2.18 from the pension settlement charge and decreased 28.1 percent compared to the prior-year period. Operating (non-GAAP) diluted earnings per share of $6.41 increased 11.7 percent compared to the prior-year period.
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Management Discussion – (continued)
At September 30, 2024, the balance sheet remained strong with financial flexibility to support and invest in the business. Cash and cash equivalents, restricted cash and marketable securities at September 30, 2024 of $13.7 billion increased $0.3 billion from December 31, 2023 and debt of $56.6 billion at September 30, 2024 was flat from prior-year end.
Total assets decreased $0.9 billion ($0.7 billion adjusted for currency) from December 31, 2023 primarily driven by a decrease in receivables, partially offset by an increase in goodwill and intangible assets mainly related to the StreamSets and webMethods acquisition. Total liabilities decreased $2.8 billion ($2.9 billion adjusted for currency) from December 31, 2023 primarily driven by decreases in tax liabilities and accounts payable. Total equity of $24.5 billion increased $1.9 billion from December 31, 2023 primarily driven by the year-to-date net income, including the impact of the pension settlement charge, a decrease in accumulated other comprehensive loss mainly driven by retirement-related benefit plans due to the pension settlement charge of $2.0 billion net of tax, and common stock issuances; partially offset by dividends paid.
Cash provided by operating activities was $9.1 billion in the first nine months of 2024, a decrease of $0.4 billion compared to the first nine months of 2023 and free cash flow was $6.6 billion, an increase of $1.5 billion versus the prior-year period. Refer to page 81 for additional information on free cash flow. Net cash used in investing activities of $3.6 billion decreased $6.3 billion compared to the prior-year period. Financing activities were a net use of cash of $5.4 billion in the first nine months of 2024 compared to $0.2 billion in the prior-year period.


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Management Discussion – (continued)
Third Quarter in Review
Results of Continuing Operations
Segment Details
As discussed in the "Organization of Information" section, we made changes to our organizational structure and management system in the first quarter of 2024. With these changes, we revised our reportable segments and updated the title of our segment performance metric from pre-tax income from continuing operations to segment profit.
The following tables present each reportable segment’s revenue and gross margin results, followed by an analysis of the third quarter and first nine months of 2024 versus the third quarter and first nine months of 2023 reportable segments results. Prior-year results have been recast to reflect the January 2024 segment changes as described in note 4, "Segments."
(Dollars in millions)Yr.-to-Yr.
Percent/Margin
Change		Yr.-to-Yr.
Percent
Change
Adjusted For
Currency
For the three months ended September 30:2024
2023 (1)
Revenue:    
Software$6,524 $5,947 9.7 %   9.6 %
Gross margin83.2 %82.3 %0.9 pts. 
Consulting5,152 5,178 (0.5)%   (0.2)%
Gross margin28.4 %27.6 %0.9 pts. 
Infrastructure3,042 3,272 (7.0)%   (6.7)%
Gross margin55.0 %53.7 %1.2 pts. 
Financing181 186 (2.5)%   (1.3)%
Gross margin47.2 %49.7 %(2.5)pts. 
Other68 170 (60.0)%   (60.2)%
Gross margin(342.6)%(88.3)%(254.4)pts. 
Total revenue$14,968 $14,752 1.5 %   1.6 %
Total gross profit$8,420 $8,023 5.0 %    
Total gross margin56.3 %54.4 %1.9 pts.  
Non-operating adjustments: 
Amortization of acquired intangible assets192 162 18.6 %    
Operating (non-GAAP) gross profit$8,612 $8,185 5.2 %    
Operating (non-GAAP) gross margin 57.5 %55.5 %2.1 pts.  
(1)Recast to reflect January 2024 segment changes.

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Management Discussion – (continued)
(Dollars in millions)Yr.-to-Yr.
Percent/Margin
Change		Yr.-to-Yr.
Percent
Change
Adjusted For
Currency
For the nine months ended September 30:2024
2023 (1)
Revenue:    
Software$19,162 $17,832 7.5 %8.0 %
Gross margin83.1 %82.3 %0.8 pts. 
Consulting15,517 15,601 (0.5)%   1.1 %
Gross margin26.7 %26.3 %0.4 pts. 
Infrastructure9,764 9,988 (2.3)%   (1.2)%
Gross margin55.3 %54.0 %1.3 pts. 
Financing543 566 (4.1)%   (3.1)%
Gross margin48.2 %47.5 %0.7 pts. 
Other214 491 (56.4)%   (56.5)%
Gross margin(286.7)%(83.8)%(202.9)pts. 
Total revenue$45,199 $44,479 1.6 %2.7 %
Total gross profit$25,112 $24,033 4.5 % 
Total gross margin55.6 %54.0 %1.5 pts.  
Non-operating adjustments:    
Amortization of acquired intangible assets533 460 15.9 %    
Operating (non-GAAP) gross profit$25,645 $24,492 4.7 %    
Operating (non-GAAP) gross margin 56.7 %55.1 %1.7 pts.  
(1)Recast to reflect January 2024 segment changes.
Software
(Dollars in millions)Yr.-to-Yr.
Percent
Change		Yr.-to-Yr.
Percent
Change
Adjusted For
Currency
For the three months ended September 30:2024
2023 (1)
Software revenue:$6,524 $5,947 9.7 %9.6 %
Hybrid Platform & Solutions$4,600 $4,187 9.8 %9.7 %
Red Hat13.7 13.8 
Automation13.2 12.9 
Data & AI5.3 5.1 
Security(1.2)(1.0)
Transaction Processing1,925 1,759 9.4 9.4 
(1)Recast to reflect January 2024 segment changes.
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Management Discussion – (continued)
(Dollars in millions)Yr.-to-Yr.
Percent
Change		Yr.-to-Yr.
Percent
Change
Adjusted For
Currency
For the nine months ended September 30:2024
2023 (1)
Software revenue:$19,162 $17,832 7.5 %8.0 %
Hybrid Platform & Solutions$13,272 $12,388 7.1 %7.6 %
Red Hat9.8 10.4 
Automation13.7 14.1 
Data & AI0.8 1.1 
Security(0.5)(0.1)
Transaction Processing5,889 5,444 8.2 8.9 
(1)Recast to reflect January 2024 segment changes.
Software revenue of $6,524 million increased 9.7 percent as reported (9.6 percent adjusted for currency) in the third quarter of 2024 compared to the prior-year period, reflecting accelerated revenue growth in total Software and in Hybrid Platform & Solutions as compared to the quarterly year-to-year growth rates in the first-half 2024. This performance reflects the repositioning of Software around our key growth platforms, including Hybrid Cloud, Automation, Data and Transaction Processing, where we deliver a differentiated value proposition to our clients to help address their most pressing needs. We delivered strong growth in our recurring revenue base and have momentum from innovation across our Software portfolio. Red Hat revenue growth accelerated in the third quarter and contributed approximately 3.5 points of growth to total Software. The combination of innovation and recurring revenue also contributed approximately 3.5 points to total Software revenue growth. In addition, our focused acquisition strategy contributed approximately 3 points to our total Software revenue growth.
Hybrid Platform & Solutions revenue of $4,600 million increased 9.8 percent as reported (9.7 percent adjusted for currency) in the third quarter of 2024 compared to the prior-year period, driven primarily by strong growth in Red Hat, Automation and Data & AI. Red Hat revenue increased 13.7 percent as reported (13.8 percent adjusted for currency) in the third quarter of 2024. We gained market share across each of our key solutions, as OpenShift and Ansible each continued to grow year-to-year revenue greater than 20 percent in the third quarter, and RHEL had double-digit, year-to-year growth in the quarter. This revenue growth within Red Hat reflects the demand for our hybrid cloud solutions as clients continue to prioritize application modernization on OpenShift containers and Ansible automation to optimize their IT spend and reduce operational complexity. We had strong acceleration in Red Hat's subscription business this quarter compared to the second-quarter 2024 and the consumption-based services business returned to growth in the third quarter compared to the prior-year period. Automation revenue increased 13.2 percent as reported (12.9 percent adjusted for currency) in the third quarter of 2024 compared to the prior-year period driven by our Software-as-a-Service subscription offerings such as AI Ops and Management, which includes the revenue contribution from Apptio. The Apptio acquisition closed in August last year and continues to build strong synergies with our automation capabilities and broader software portfolio, driving continued growth in signings and annual recurring revenue. Data & AI revenue increased 5.3 percent as reported (5.1 percent adjusted for currency) driven by continued growth in watsonx including our AI Assistant for Customer Care.
Across Hybrid Platform & Solutions, our annual recurring revenue (ARR) was $14.9 billion. ARR is a key performance metric management uses to assess the health and growth trajectory of our Hybrid Platform & Solutions business within the Software segment. The metric was updated in the first quarter of 2024 to reflect the organizational changes described in note 4, “Segments,” and to simplify the calculation. ARR is calculated by using the current quarter’s recurring revenue and then multiplying that value by four. This value includes the following consumption models: (1) software subscription agreements, including committed term licenses, (2) as-a-service arrangements such as SaaS and PaaS, and (3) maintenance and support contracts. ARR should be viewed independently of revenue as this performance metric and its inputs may not represent revenue that will be recognized in future periods.
Transaction Processing revenue of $1,925 million increased 9.4 percent as reported and adjusted for currency in the third quarter of 2024 compared to the prior-year period, reflecting the growing client demand for workload capacity, solid renewal rates, and continued customer interest in our new generative AI product, watsonx Code Assistant for Z.
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Management Discussion – (continued)
For the first nine months of 2024, Software revenue of $19,162 million increased 7.5 percent as reported (8.0 percent adjusted for currency) compared to the same period in 2023, driven by solid growth in Hybrid Platform & Solutions, led by Automation and Red Hat, and Transaction Processing. This performance reflects the continued demand for the high-value capabilities within our Hybrid Platform & Solutions offerings and the value of our mission-critical software portfolio within Transaction Processing which supports growing workloads on our hardware platforms. This revenue performance also reflects the investments we have been making in Software, both organically and in acquisitions.
(Dollars in millions)Yr.-to-Yr.
Percent/
Margin
Change
For the three months ended September 30:2024
2023 (1)
Software:   
Gross profit$5,431 $4,896 10.9 %    
Gross profit margin83.2 %82.3 %0.9 pts.  
Segment profit$1,969 $1,722 14.4 %    
Segment profit margin 30.2 %29.0 %1.2 pts.  
(Dollars in millions)Yr.-to-Yr.
Percent/
Margin
Change
For the nine months ended September 30:2024
2023 (1)
Software:   
Gross profit$15,925 $14,681 8.5 %    
Gross profit margin83.1 %82.3 %0.8 pts. 
Segment profit$5,582 $4,850 15.1 %    
Segment profit margin29.1 %27.2 %1.9 pts. 
(1)Recast to reflect January 2024 segment changes.
Software gross profit margin increased 0.9 points to 83.2 percent in the third quarter of 2024 compared to the prior-year period. Segment profit of $1,969 million increased 14.4 percent and segment profit margin of 30.2 percent increased 1.2 points compared to the prior-year period. The segment profit growth reflects our operating leverage driven by our revenue performance and portfolio mix and the benefits of our continued productivity actions, partially offset by key investments in software innovation.
For the first nine months of 2024, gross profit margin increased 0.8 points to 83.1 percent, compared to the first nine months of 2023. Segment profit of $5,582 million increased 15.1 percent and segment profit margin of 29.1 percent increased 1.9 points compared to the prior-year period. The segment profit growth for the first nine months of 2024 was driven by the same factors described for the third quarter.

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Management Discussion – (continued)
Consulting
(Dollars in millions)  Yr.-to-Yr.
Percent
Change		Yr.-to-Yr.
Percent
Change
Adjusted For
Currency
For the three months ended September 30:2024
2023 (1)
Consulting revenue:$5,152 $5,178 (0.5)%(0.2)%
Business Transformation$2,327 $2,291 1.6 %1.7 %
Technology Consulting905 943 (4.0)(3.6)
Application Operations1,921 1,944 (1.2)(0.8)
(Dollars in millions)  Yr.-to-Yr.
Percent
Change		Yr.-to-Yr.
Percent
Change
Adjusted For
Currency
For the nine months ended September 30:2024
2023 (1)
Consulting revenue:$15,517 $15,601 (0.5)%1.1 %
Business Transformation$7,004 $6,869 2.0 %3.5 %
Technology Consulting2,752 2,808 (2.0)0.0 
Application Operations5,761 5,924 (2.8)(1.1)
(1)Recast to reflect January 2024 segment changes.

Consulting revenue of $5,152 million decreased 0.5 percent as reported (0.2 percent adjusted for currency) in the third quarter of 2024 compared to the prior-year period, reflecting a challenging macroeconomic environment which is impacting client buying behavior. At the same time, clients are reprioritizing their IT budgets to prepare for generative AI. We continued to build a solid generative AI business as we partner with our clients to design and scale AI solutions and develop new ways of working. This early momentum in engaging with clients as they architect their AI strategies is establishing IBM Consulting as a strategic partner of choice. In the third quarter, our Red Hat consulting practice, which helps clients optimize how they build, deploy, and manage applications for a hybrid cloud environment continued to grow revenue at a double-digit rate on a year-to-year basis in the third quarter, with the highest level of single-quarter signings since the acquisition of Red Hat. In addition, Consulting revenue generated through our strategic partnerships continued to contribute strong revenue growth.
In the third quarter of 2024, Business Transformation revenue of $2,327 million increased 1.6 percent as reported (1.7 percent adjusted for currency) compared to the prior-year period driven by strength in transformation projects for data, finance and supply chain.
Technology Consulting revenue of $905 million decreased 4.0 percent as reported (3.6 percent adjusted for currency) in the third quarter of 2024 compared to the prior-year period, driven by a decline in our application development offerings, partially offset by solid growth in our cloud-based application services across modernization development and management services.
Application Operations revenue of $1,921 million decreased 1.2 percent as reported (0.8 percent adjusted for currency) compared to the prior-year period, reflecting a reprioritization of spending by clients for on-premise customized services.
For the first nine months of 2024, Consulting revenue of $15,517 million decreased 0.5 percent as reported, but grew 1.1 percent adjusted for currency, led by strength in our Business Transformation offerings with revenue growth year to year driven by transformation projects for data, finance and supply chain. We had double-digit revenue growth in both our Red Hat and strategic partner driven practices in the first nine months of 2024 compared to the prior-year period. Throughout 2024, the uncertainty of the macroeconomic environment has delayed client spending on smaller, discretionary projects, however, we had solid demand for larger digital transformation projects.
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Management Discussion – (continued)
(Dollars in millions)Yr.-to-Yr.
Percent/
Margin
Change
For the three months ended September 30:2024
2023 (1)
Consulting:   
Gross profit$1,464 $1,427 2.6 %    
Gross profit margin28.4 %27.6 %0.9 pts.  
Segment profit$559 $566 (1.2)%    
Segment profit margin10.9 %10.9 %(0.1)pts.  
(Dollars in millions)  Yr.-to-Yr.
Percent/
Margin
Change
For the nine months ended September 30:2024
2023 (1)
Consulting:   
Gross profit$4,141 $4,105 0.9 %    
Gross profit margin26.7 %26.3 %0.4 pts.  
Segment profit$1,447 $1,476 (1.9)%    
Segment profit margin9.3 %9.5 %(0.1)pts.  
(1)Recast to reflect January 2024 segment changes.

In the third quarter of 2024, Consulting gross profit margin of 28.4 percent increased 0.9 points on a year-to-year basis. Segment profit of $559 million decreased 1.2 percent and segment profit margin of 10.9 percent decreased 0.1 points year to year. The gross profit margin expansion reflects the savings from productivity actions we have taken. Our segment profit margin improved 2.0 points compared to the second-quarter 2024 reflecting the benefits from our productivity actions, but was essentially flat year to year.
For the first nine months of 2024, Consulting gross profit margin of 26.7 percent increased 0.4 points compared to the prior-year period. Segment profit of $1,447 million decreased 1.9 percent and segment profit margin of 9.3 percent decreased 0.1 points in the first nine months of 2024 compared to the prior-year period. The nine-month margin performance was driven primarily by the same factors as described above for the third quarter.
Consulting Signings and Book-to-Bill
(Dollars in millions)Yr.-to-Yr.
Percent
Change		Yr.-to-Yr.
Percent
Change
Adjusted For
Currency
For the three months ended September 30:2024
2023 (1)
Total Consulting signings$5,448 $5,964 (8.7)%(9.3)%
(Dollars in millions)Yr.-to-Yr.
Percent
Change		Yr.-to-Yr.
Percent
Change
Adjusted For
Currency
For the nine months ended September 30:2024
2023 (1)
Total Consulting signings$16,637 $17,293 (3.8)%(2.7)%
(1)Recast to reflect January 2024 segment changes.
In the third quarter of 2024, Consulting signings decreased 8.7 percent as reported and 9.3 percent adjusted for currency. Clients are reprioritizing their IT budgets to prepare for investments in generative AI, while the challenging macroeconomic environment is impacting client spending, particularly on more discretionary projects. We continued to have solid demand for large digital transformations that contributed to the $5.4 billion in signings in the quarter. Our book-to-bill ratio for the trailing twelve-months was 1.14. Book-to-bill represents the ratio of IBM Consulting signings to its revenue over the same period. The metric is a useful indicator of the demand of our business over time.
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Management Discussion – (continued)
Signings are management’s initial estimate of the value of a client’s commitment under a services contract within IBM Consulting. There are no third-party standards or requirements governing the calculation of signings. The calculation used by management involves estimates and judgments to gauge the extent of a client’s commitment, including the type and duration of the agreement, and the presence of termination charges or wind-down costs.
Contract extensions and increases in scope are treated as signings only to the extent of the incremental new value. Total signings can vary over time due to a variety of factors including, but not limited to, the timing of signing a small number of larger contracts. Signings associated with an acquisition will be recognized on a prospective basis.
Management believes the estimated values of signings disclosed provide an indication of our forward-looking revenue. Signings are used to monitor the performance of the business and viewed as useful information for management and shareholders. The conversion of signings into revenue may vary based on the types of services and solutions, contract duration, customer decisions, and other factors, which may include, but are not limited to, the macroeconomic environment.
Infrastructure
(Dollars in millions)Yr.-to-Yr.
Percent
Change		Yr.-to-Yr.
Percent
Change
Adjusted For
Currency
For the three months ended September 30:20242023
Infrastructure revenue:$3,042 $3,272 (7.0)%(6.7)%
Hybrid Infrastructure$1,765 $1,943 (9.1)%(9.2)%
IBM Z(18.7)(18.6)
Distributed Infrastructure(2.8)(3.0)
Infrastructure Support1,277 1,329 (3.9)(3.1)
(Dollars in millions)Yr.-to-Yr.
Percent
Change		Yr.-to-Yr.
Percent
Change
Adjusted For
Currency
For the nine months ended September 30:20242023
Infrastructure revenue:$9,764 $9,988 (2.3)%(1.2)%
Hybrid Infrastructure$5,928 $5,912 0.3 %1.1 %
IBM Z(2.7)(1.8)
Distributed Infrastructure2.2 3.0 
Infrastructure Support3,835 4,076 (5.9)(4.5)

Infrastructure revenue of $3,042 million decreased 7.0 percent as reported and 6.7 percent adjusted for currency in the third quarter of 2024 compared to the prior-year period, reflecting the impact of product cycle dynamics in both Hybrid Infrastructure and Infrastructure Support.
Hybrid Infrastructure revenue of $1,765 million decreased 9.1 percent as reported and 9.2 percent adjusted for currency in the third quarter of 2024 compared to the prior-year period. Within Hybrid Infrastructure, IBM Z decreased 18.7 percent as reported (18.6 percent adjusted for currency) reflecting the z16 program cycle dynamics. Ten quarters into the program, z16 continued to exceed the total revenue generated by each prior cycle and resulted in a greater than 30 percent increase in program-to-date installed MIPs. Our clients continue to face increased demands for workloads given rapid business expansion, complex regulatory environments, and increased cybersecurity threats and attacks. IBM Z remains uniquely positioned to address these demands with the technologies that our latest program offers, which includes embedded AI at scale, quantum-safe security, and cloud-native development for hybrid cloud. Distributed Infrastructure revenue decreased 2.8 percent as reported and 3.0 percent adjusted for currency, driven primarily by declines in Cloud platform revenue, as well as a decrease in Power systems revenue reflecting product cycle dynamics, partially offset by solid growth in our Storage business as we continued to take market share in storage technology.
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Management Discussion – (continued)
Infrastructure Support revenue of $1,277 million decreased 3.9 percent as reported (3.1 percent adjusted for currency) in the third quarter of 2024 compared to the prior-year period, driven by product cycle dynamics and volume decline in support of non-IBM equipment.
For the first nine months of 2024, Infrastructure revenue of $9,764 million decreased 2.3 percent as reported (1.2 percent adjusted for currency) compared to the prior-year period, driven by declines in Infrastructure Support partially offset by growth in Hybrid Infrastructure. Within Hybrid Infrastructure, Distributed Infrastructure revenue increased in the first nine months of 2024 driven primarily by growth in Storage and Power systems, partially offset by a revenue decline in IBM Z reflecting the program cycle. Infrastructure Support revenue declined in the first nine months of 2024 driven by volume declines in support of non-IBM equipment and IBM product cycle dynamics.
(Dollars in millions)Yr.-to-Yr.
Percent/
Margin
Change
For the three months ended September 30:2024
2023 (1)
Infrastructure:   
Gross profit$1,672 $1,758 (4.9)%    
Gross profit margin55.0 %53.7 %1.2 pts.  
Segment profit$422 $490 (13.8)%    
Segment profit margin13.9 %15.0 %(1.1)pts.  
(Dollars in millions)Yr.-to-Yr.
Percent/
Margin
Change
For the nine months ended September 30:2024
2023 (1)
Infrastructure:   
Gross profit$5,398 $5,389 0.2 %
Gross profit margin55.3 %54.0 %1.3 pts.  
Segment profit$1,387 $1,529 (9.3)%    
Segment profit margin14.2 %15.3 %(1.1)pts.  
(1)Recast to reflect January 2024 segment changes.

Infrastructure gross profit margin of 55.0 percent increased 1.2 points in the third quarter of 2024 compared to the prior-year period, with margin expansion in Infrastructure Support and Hybrid Infrastructure. The increase in margin within Infrastructure Support was driven by product mix. The increase in margin within Hybrid Infrastructure was driven primarily by margin expansion in both IBM Z and Distributed Infrastructure, partially offset by portfolio mix. In the third quarter of 2024, Infrastructure segment profit of $422 million decreased 13.8 percent and segment profit margin of 13.9 percent decreased 1.1 points compared to the prior-year period. The year-to-year decrease in segment profit and margin reflects the revenue decline due to product cycle dynamics in IBM Z and Distributed Infrastructure and continued investments in innovation for our next generation of products. This performance was partially offset by higher IP and custom development income year to year and savings from productivity actions.
For the first nine months of 2024, gross profit margin of 55.3 percent increased 1.3 points compared to the prior-year period, driven by margin expansion in Hybrid Infrastructure and Infrastructure Support. Within Hybrid Infrastructure, we had margin improvement across our hardware platforms. The gross profit margin improvement in Infrastructure Support reflects the benefits from productivity and cost management. Infrastructure segment profit of $1,387 million decreased 9.3 percent and segment profit margin of 14.2 percent decreased 1.1 points in the first nine months of 2024 compared to the prior-year period. This performance reflects the same factors described for the third quarter, and also included approximately a half of a point of impact from currency.
Financing
Refer to pages 82 through 84 for a discussion of Financing’s segment results.
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Management Discussion – (continued)
Geographic Revenue
In addition to the revenue presentation by reportable segment, we also measure revenue performance on a geographic basis.
(Dollars in millions)Yr.-to-Yr.
Percent
Change 		Yr.-to-Yr.
Percent
Change
Adjusted For
Currency
For the three months ended September 30:20242023
Total Revenue$14,968 $14,752 1.5 %1.6 %
Americas$7,453 $7,686 (3.0)%(2.4)%
Europe/Middle East/Africa (EMEA)4,584 4,223 8.5 6.8 
Asia Pacific2,932 2,843 3.1 4.5 
(Dollars in millions)Yr.-to-Yr.
Percent
Change 		Yr.-to-Yr.
Percent
Change
Adjusted For
Currency
For the nine months ended September 30:20242023
Total Revenue$45,199 $44,479 1.6 %2.7 %
Americas$22,727 $22,810 (0.4)%0.0 %
Europe/Middle East/Africa (EMEA)13,619 13,156 3.5 2.6 
Asia Pacific8,853 8,513 4.0 9.8 
Geographic revenue performance for the three months ended September 30, 2024:
Americas revenue of $7,453 million decreased 3.0 percent as reported and 2.4 percent adjusted for currency in the third quarter of 2024 compared to the prior-year period. The U.S. decreased 3.5 percent. Canada decreased 7.5 percent as reported and 6.1 percent adjusted for currency. Latin America increased 8.3 percent as reported and 13.5 percent adjusted for currency, with Brazil increasing 11.5 percent as reported and 18.9 percent adjusted for currency.
In EMEA, total revenue of $4,584 million increased 8.5 percent as reported and 6.8 percent adjusted for currency. Germany, France and the UK increased 19.6 percent, 5.2 percent and 4.7 percent, respectively, as reported, and 18.1 percent, 4.1 percent and 1.9 percent, respectively, adjusted for currency. Italy decreased 1.6 percent as reported and 2.8 percent adjusted for currency.
Asia Pacific revenue of $2,932 million increased 3.1 percent as reported and 4.5 percent adjusted for currency. Japan increased 11.4 percent as reported and 14.7 percent adjusted for currency. India was flat as reported and increased 1.2 percent adjusted for currency. Australia and China decreased 16.8 percent and 9.6 percent, respectively, as reported, and 18.9 percent and 10.5 percent, respectively, adjusted for currency.
Geographic revenue performance for the nine months ended September 30, 2024:
Americas revenue of $22,727 million decreased 0.4 percent as reported, but was flat adjusted for currency. The U.S. increased 0.8 percent compared to the prior-year period. Canada decreased 6.7 percent as reported and 5.8 percent adjusted for currency. Latin America decreased 1.7 percent as reported, but grew 0.8 percent adjusted for currency, with a decline in Brazil of 2.1 percent as reported, but growth of 0.6 percent adjusted for currency.
In EMEA, total revenue of $13,619 million increased 3.5 percent as reported and 2.6 percent adjusted for currency. Germany, the UK and Italy increased 9.1 percent, 2.8 percent and 1.7 percent, respectively, as reported, and 8.6 percent, 0.3 percent and 1.3 percent, respectively, adjusted for currency. France decreased 0.9 percent as reported and 1.2 percent adjusted for currency.
Asia Pacific revenue of $8,853 million increased 4.0 percent as reported and 9.8 percent adjusted for currency. Japan increased 8.5 percent as reported and 18.9 percent adjusted for currency. India increased 5.6 percent as reported and 6.9 percent adjusted for currency. China and Australia decreased 6.5 percent and 4.5 percent, respectively, as reported, and 5.0 percent and 3.8 percent, respectively, adjusted for currency.
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Management Discussion – (continued)
Expense
Total Expense and Other (Income)
(Dollars in millions)Yr.-to-Yr.
Percent
Change
For the three months ended September 30:20242023
Total expense and other (income)$9,222 $6,150 50.0 %
Non-operating adjustments:   
Amortization of acquired intangible assets$(290)$(252)15.0 %
Acquisition-related charges(10)(25)(0.6)
Non-operating retirement-related (costs)/income (1)
(2,797)12 nm
Operating (non-GAAP) expense and other (income)$6,125 $5,885 4.1 %
Total expense-to-revenue ratio61.6 %41.7 %19.9 pts. 
Operating (non-GAAP) expense-to-revenue ratio40.9 %39.9 %1.0 pts. 
(Dollars in millions)Yr.-to-Yr.
Percent
Change
For the nine months ended September 30:20242023
Total expense and other (income)$22,621 $19,102 18.4 %
Non-operating adjustments:   
Amortization of acquired intangible assets$(815)$(735)11.0 %
Acquisition-related charges(106)(35)2.1 
Non-operating retirement-related (costs)/income (1)
(2,991)16 nm
Operating (non-GAAP) expense and other (income)$18,709 $18,348 2.0 %
Total expense-to-revenue ratio50.0 %42.9 %7.1 pts. 
Operating (non-GAAP) expense-to-revenue ratio41.4 %41.3 %0.1 pts. 
(1)Includes the impact of a one-time, non-cash, pre-tax pension settlement charge of $2.7 billion. Refer to note 18, "Retirement-Related Benefits," for additional information.
nm - not meaningful
For additional information regarding total expense and other (income) for both expense presentations, refer to the following analyses by category.
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Management Discussion – (continued)
Selling, General and Administrative Expense
(Dollars in millions)Yr.-to-Yr.
Percent
Change
For the three months ended September 30:20242023
Selling, general and administrative expense:   
Selling, general and administrative — other$3,865 $3,730 3.6 %
Advertising and promotional expense279 303 (7.8)
Workforce rebalancing charges306 34 nm
Amortization of acquired intangible assets290 252 15.0 
Stock-based compensation167 148 13.2 
Provision for/(benefit from) expected credit loss expense4 (9)nm
Total selling, general and administrative expense$4,911 $4,458 10.2 %
Non-operating adjustments:   
Amortization of acquired intangible assets$(290)$(252)15.0 %
Acquisition-related charges(10)(25)(58.5)
Operating (non-GAAP) selling, general and administrative expense$4,611 $4,181 10.3 %
(Dollars in millions)Yr.-to-Yr.
Percent
Change
For the nine months ended September 30:20242023
Selling, general and administrative expense:   
Selling, general and administrative — other$11,901 $11,607 2.5 %
Advertising and promotional expense912 989 (7.9)
Workforce rebalancing charges701 410 71.3 
Amortization of acquired intangible assets815 734 11.1 
Stock-based compensation511 465 9.8 
Provision for/(benefit from) expected credit loss expense(17)7 nm
Total selling, general and administrative expense$14,823 $14,212 4.3 %
Non-operating adjustments:   
Amortization of acquired intangible assets$(815)$(734)11.1 %
Acquisition-related charges(39)(34)14.4 
Operating (non-GAAP) selling, general and administrative expense$13,969 $13,444 3.9 %
nm - not meaningful
Total selling, general and administrative (SG&A) expense increased 10.2 percent in the third quarter of 2024 versus the prior-year period driven primarily by the following factors:
•Higher workforce rebalancing charges (6 points) to address stranded costs and accelerate our productivity initiatives; and
•Higher spending, including expenses of acquired businesses, as a result of our continued investment to drive our hybrid cloud and AI strategy; partially offset by benefits from productivity and the actions taken to transform our operations (4 points).
Operating (non-GAAP) SG&A expense increased 10.3 percent year to year primarily driven by the same factors above.

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Management Discussion – (continued)
Total SG&A expense increased 4.3 percent in the first nine months of 2024 versus the prior-year period driven primarily by the following factors:

•Higher spending, including expenses from acquired businesses, as a result of our continued investment to drive our hybrid cloud and AI strategy; partially offset by benefits from productivity and the actions taken to transform our operations (3 points); and
•Higher workforce rebalancing charges (2 points) to address stranded costs and accelerate our productivity initiatives; partially offset by
•The effects of currency (1 point).
Operating (non-GAAP) SG&A expense increased 3.9 percent year to year primarily driven by the same factors above.
Expected credit loss expense was a benefit of $17 million in the first nine months of 2024 compared to a provision of $7 million in the prior-year period. The year-to-year change was primarily driven by lower reserve requirements in the current year. Refer to "Receivables and Allowances" section on page 75 for additional information.
Research, Development and Engineering
(Dollars in millions)Yr.-to-Yr.
Percent
Change
For the three months ended September 30:20242023
Research, development and engineering expense$1,876 $1,685 11.3 %
(Dollars in millions)Yr.-to-Yr.
Percent
Change
For the nine months ended September 30:20242023
Research, development and engineering expense$5,512 $5,027 9.7 %
Research, development and engineering (RD&E) expense increased 11.3 percent and 9.7 percent year to year in the third quarter and first nine months of 2024, respectively. The year-to-year increase in RD&E expense was primarily driven by investments to drive innovation in AI, hybrid cloud and quantum, as well as in Infrastructure ahead of our next IBM Z cycle in 2025.

Intellectual Property and Custom Development Income
(Dollars in millions)Yr.-to-Yr.
Percent
Change
For the three months ended September 30:20242023
Intellectual property and custom development income:   
Intellectual property income (1) (2)
$62 $76 (17.9)%
Custom development income176 114 53.9 
Total$238 $190 25.3 %
(1)Includes licensing, royalty-based fees and sales.
(2)Prior period has been reclassified to conform to the change in 2024 presentation.

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Management Discussion – (continued)
(Dollars in millions)Yr.-to-Yr.
Percent
Change
For the nine months ended September 30:20242023
Intellectual property and custom development income:   
Intellectual property income (1) (2)
$211 $269 (21.5)%
Custom development income484 349 38.8 
Total$696 $618 12.6 %
(1)Includes licensing, royalty-based fees and sales.
(2)Prior period has been reclassified to conform to the change in 2024 presentation.

Total intellectual property and custom development income increased 25.3 percent year to year in the third quarter, and increased 12.6 percent in the first nine months of 2024 compared to the prior-year period. The increase in the third quarter and first nine months of 2024 was primarily driven by joint development and licensing agreements with a Japanese consortium to leverage our intellectual property and expertise on advanced semiconductors.
The timing and amount of licensing and sales of IP may vary significantly from period to period depending upon the timing of licensing agreements, economic conditions, industry consolidation and the timing of new patents and know-how development.

Other (Income) and Expense
(Dollars in millions)Yr.-to-Yr.
Percent
Change
For the three months ended September 30:20242023
Other (income) and expense:   
(Gains)/losses on foreign currency transactions$470 $(260)nm
(Gains)/losses on derivative instruments (428)316 nm
Interest income(170)(156)8.6 %
Net (gains)/losses from securities and investment assets(4)(5)(33.9)
Retirement-related costs/(income)
2,797 (12)nm
Other (1)
(422)(97)nm
Total other (income) and expense$2,244 $(215)nm
Non-operating adjustments:   
Non-operating retirement-related (costs)/income
(2,797)12 nm
Operating (non-GAAP) other (income) and expense$(553)$(203)172.3 %
(1)2024 amount includes a pre-tax gain of $351 million from the sale of certain QRadar SaaS assets. Refer to note 5, "Acquisitions & Divestitures," for additional information.
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Management Discussion – (continued)
(Dollars in millions)Yr.-to-Yr.
Percent
Change
For the nine months ended September 30:20242023
Other (income) and expense:   
(Gains)/losses on foreign currency transactions$126 $(338)nm
(Gains)/losses on derivative instruments (1)
(1)315 nm
Interest income(597)(527)13.2 %
Net (gains)/losses from securities and investment assets(14)3 nm
Retirement-related costs/(income)
2,991 (16)nm
Other (2)
(810)(158)nm
Total other (income) and expense$1,694 $(721)nm
Non-operating adjustments:   
Amortization of acquired intangible assets$— $(1)(100.0)% 
Acquisition-related charges (1)
(68)(1)nm
Non-operating retirement-related (costs)/income
(2,991)16 nm
Operating (non-GAAP) other (income) and expense$(1,364)$(707)93.1 %
(1)2024 includes the realized loss of $68 million recognized on foreign exchange derivative contracts entered into by the company prior to the acquisition of StreamSets and webMethods from Software AG. Refer to note 16, “Derivative Financial Instruments,” for additional information.
(2)2024 amount includes a pre-tax gain of $351 million from the sale of certain QRadar SaaS assets and a pre-tax gain of $241 million from the divestiture of The Weather Company assets. Refer to note 5, "Acquisitions & Divestitures," for additional information.
nm - not meaningful
Total other (income) and expense was $2,244 million of expense in the third quarter of 2024 compared to income of $215 million in the prior-year period. The year-to-year change was primarily driven by:
•Non-operating retirement-related cost of $2,797 million in the current-year period versus $12 million of income in the prior-year period primarily driven by the impact of a one-time, non-cash pension settlement charge of $2,725 million in the third quarter of 2024 and an increase in recognized actuarial losses due to the change in amortization period effective January 1, 2024 as described in note 18, "Retirement-Related Benefits,"; partially offset by
•A gain of $351 million from the sale of certain QRadar SaaS assets in the third-quarter 2024. Refer to note 5, "Acquisitions & Divestitures," for additional information.
Operating (non-GAAP) other (income) and expense was income of $553 million in the third quarter of 2024 and increased $350 million compared to the prior-year period. The year-to-year change was primarily driven by the gain recognized from the sale of certain QRadar SaaS assets in the current year.
Total other (income) and expense was $1,694 million of expense in the first nine months of 2024 compared to income of $721 million in the prior-year period. The year-to-year change was primarily driven by:
•Non-operating retirement-related cost of $2,991 million compared to $16 million of income in the prior-year period primarily driven by the factors described in the third quarter above; and
•Net exchange losses (including derivative instruments) of $124 million in the current-year period versus net exchange gains of $23 million in the prior-year period; partially offset by
•A gain of $351 million from the sale of certain QRadar SaaS assets in the third-quarter 2024. Refer to note 5, "Acquisitions & Divestitures," for additional information; and
•Higher gains on divestitures ($203 million) primarily driven by the divestiture of The Weather Company assets. Refer to note 5, "Acquisitions & Divestitures," for additional information; and
•Higher gains on sales of intangibles ($81 million) included in “Other”; and
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Management Discussion – (continued)
•Higher interest income ($70 million) primarily driven by a higher average cash balance in the current year.
Operating (non-GAAP) other (income) and expense was income of $1,364 million in the first nine months of 2024 and increased $658 million compared to the prior-year period. The year-to-year change was primarily driven by the gain recognized from the sale of certain QRadar SaaS assets in the third-quarter 2024, higher gains on divestitures and sales of intangibles and higher interest income.
Interest Expense
(Dollars in millions)Yr.-to-Yr.
Percent
Change
For the three months ended September 30:20242023
Interest expense$429 $412 4.2 %
(Dollars in millions)Yr.-to-Yr.
Percent
Change
For the nine months ended September 30:20242023
Interest expense$1,288 $1202 7.2 %
Interest expense increased $17 million and $86 million year to year in the third quarter and first nine months of 2024, respectively. Interest expense is presented in cost of financing in the Consolidated Income Statement if the related external borrowings are to support the Financing external business. Overall interest expense (excluding capitalized interest) for the third quarter and first nine months of 2024 was $516 million and $1,542 million, respectively, an increase of $22 million and $85 million, respectively, compared to the prior-year periods. The year-to-year dynamics for both the third quarter and first nine months of 2024 were primarily driven by higher average interest rates and a higher average debt balance in the current year.
Retirement-Related Plans
The following tables provide the total pre-tax cost for all retirement-related plans. The operating cost amounts are included in the Consolidated Income Statement within the caption (e.g., Cost, SG&A, RD&E) relating to the job function of the plan participants. The non-operating cost amounts are included in other (income) and expense.
(Dollars in millions)Yr.-to-Yr.
Percent
Change
For the three months ended September 30:20242023
Retirement-related plans — cost:   
Service cost$143 $46 209.2 %
Multi-employer plans3 4 (19.0)
Cost of defined contribution plans111 245 (54.7)
Total operating costs$257 $295 (13.0)%
Interest cost$535 $604 (11.5)%
Expected return on plan assets(708)(745)(5.0)
Recognized actuarial losses244 126 93.2 
Amortization of prior service costs/(credits)(2)(2)(18.4)
Curtailments/settlements (1)
2,727 2 nm 
Other costs0 3 (89.9)
Total non-operating costs/(income) (1)
$2,797 $(12)nm 
Total retirement-related plans — cost (1)
$3,053 $283 nm 
(1)2024 includes the impact of a one-time, non-cash, pre-tax pension settlement charge of $2.7 billion. Refer to note 18, "Retirement-Related Benefits," for additional information.
nm - not meaningful
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(Dollars in millions)Yr.-to-Yr.
Percent
Change
For the nine months ended September 30:2024 2023
Retirement-related plans — cost:    
Service cost$426 $138 209.2 %
Multi-employer plans10 10 (6.5)
Cost of defined contribution plans330 756 (56.3)
Total operating costs$767 $905 (15.3)%
Interest cost$1,648 $1,807 (8.8)%
Expected return on plan assets(2,163)(2,229)(3.0)
Recognized actuarial losses759 384 97.7 
Amortization of prior service costs/(credits)(5)(6)(17.8)
Curtailments/settlements (1)
2,731 7 nm 
Other costs20 22 (4.9)
Total non-operating costs/(income) (1)
$2,991 $(16)nm 
Total retirement-related plans — cost (1)
$3,757 $888 nm 
(1)2024 includes the impact of a one-time, non-cash, pre-tax pension settlement charge of $2.7 billion. Refer to note 18, "Retirement-Related Benefits," for additional information.
nm - not meaningful
Total pre-tax retirement-related plan cost increased by $2,771 million compared to the third quarter of 2023, primarily driven by an increase in curtailments/settlements driven by the impact of a one-time, non-cash pension settlement charge ($2,725 million), an increase in recognized actuarial losses ($118 million) and higher service cost ($97 million), partially offset by lower cost of defined contribution plans ($134 million) and lower interest costs ($69 million). Total cost for the first nine months of 2024 increased by $2,869 million compared to the first nine months of 2023, primarily driven by the impact of a one-time, non-cash pension settlement charge ($2,725 million), increase in recognized actuarial losses ($375 million) and higher service cost ($289 million), partially offset by lower cost of defined contribution plans ($426 million) and lower interest costs ($159 million).
As described in the “Operating (non-GAAP) Earnings” section, management characterizes certain retirement-related costs as operating and others as non-operating. Utilizing this characterization, operating retirement-related costs in the third quarter of 2024 were $257 million, a decrease of $38 million compared to the third quarter of 2023. The decrease was primarily driven by lower cost of defined contribution plans ($134 million), partially offset by higher service cost ($97 million) due to the U.S. retirement plan changes effective January 1, 2024. For the first nine months of 2024, operating retirement-related costs were $767 million, a decrease of $138 million compared to the prior-year period, primarily driven by lower cost of defined contribution plans ($426 million), partially offset by higher service cost ($289 million) due to U.S. retirement plan changes effective January 1, 2024. Including the related employee salary increase effective January 1, 2024, the net impact to our operating costs from the U.S. retirement plan changes was immaterial for the three and nine months ended September 30, 2024. Refer to note 18, "Retirement-Related Benefits," for additional information. Non-operating costs/(income) was $2,797 million of cost in the third quarter of 2024 compared to $12 million of income in the prior-year period and for the first nine months of 2024 non-operating costs/(income) was $2,991 million of cost compared to $16 million of income in the prior-year period. The year-to-year changes were primarily driven by an increase in curtailments/settlements including the impact of a one-time, non-cash pension settlement charge resulting from the transfer to the Insurer of a portion of the Qualified PPP in the current quarter and an increase in recognized actuarial losses due to the change in amortization period of the Qualified PPP effective January 1, 2024 as described in note 18, "Retirement-Related Benefits," partially offset by lower interest costs.
Taxes
The continuing operations benefit from income taxes in the third quarter of 2024 was $485 million, compared to a provision for income taxes of $159 million in the third quarter of 2023. The current-year tax benefit was primarily driven by the transfer to the Insurer of a portion of the Qualified PPP’s defined benefit pension obligations and related plan assets.
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The operating (non-GAAP) provision for income taxes in the third quarter of 2024 was $332 million, compared to $268 million in the third quarter of 2023.
The continuing operations benefit from income taxes in the first nine months of 2024 was $597 million, compared to a provision for income taxes of $702 million in the first nine months of 2023. The current-year tax benefit was primarily driven by the resolution of certain tax audit matters in the first quarter and the transfer to the Insurer of a portion of the Qualified PPP’s defined benefit pension obligations and related plan assets in the third quarter. The operating (non-GAAP) provision for income taxes in the first nine months of 2024 was $942 million, compared to $861 million in the first nine months of 2023.
IBM’s tax provision and effective tax rate are impacted by recurring factors including the geographical mix of income before taxes, incentives, specific transactions, changes in unrecognized tax benefits and discrete tax events, such as the settlement of income tax audits and changes in or new interpretations of tax laws. The GAAP tax provision and effective tax rate could also be affected by adjustments to the previously recorded charges for U.S. tax reform attributable to any changes in law, new regulations and guidance, and audit adjustments, among others.
During the fourth quarter of 2020, the U.S. Internal Revenue Service (IRS) concluded its examination of the company’s U.S. income tax returns for 2013 and 2014 and issued a final Revenue Agent’s Report (RAR) proposing adjustments related to certain cross-border transactions that occurred in 2013. The company filed its IRS Appeals protest in the first quarter of 2021, and in October of 2023, the IRS issued a revised RAR. These adjustments, if sustained, would increase the company’s income subject to tax by approximately $4.2 billion, with tax calculated at the relevant federal income tax rate. The company continues to strongly disagree with the IRS position and will pursue resolution at IRS Appeals and then court, if necessary. In the first quarter of 2024, the IRS concluded its examination of the company's U.S. income tax returns for 2015 and 2016 and issued a final RAR proposing adjustments related to certain cross-border transactions that occurred in 2015. The proposed adjustments, if sustained, would increase the company’s income subject to tax by approximately $1.2 billion, with tax calculated at the relevant federal income tax rate. The company strongly disagrees with the IRS position and filed its IRS Appeals protest in the second quarter of 2024. In the fourth quarter of 2021, the IRS commenced its audit of the company’s U.S. tax returns for 2017 and 2018. The company anticipates that this audit will be completed in 2024. With respect to major U.S. state and foreign taxing jurisdictions, the company is generally no longer subject to tax examinations for years prior to 2016. The company is no longer subject to income tax examination of its U.S. federal tax return for years prior to 2013. The open years contain matters that could be subject to differing interpretations of applicable tax laws and regulations as it relates to the amount and/or timing of income, deductions, and tax credits. Although the outcome of tax audits is always uncertain, the company believes that adequate amounts of tax, interest and penalties have been provided for any adjustments that are expected to result for these years.
The company is involved in a number of income tax-related matters in India challenging tax assessments issued by the India Tax Authorities. As of September 30, 2024, the company had recorded $589 million as prepaid income taxes in India. A significant portion of this balance represents cash tax deposits paid over time to protect the company’s right to appeal various income tax assessments made by the India Tax Authorities. Although the outcome of tax audits is always uncertain, the company believes that adequate amounts of tax, interest and penalties have been provided for any adjustments that are expected to result for these years.
The amount of unrecognized tax benefits at September 30, 2024 is $8,615 million which can be reduced by $613 million associated with timing adjustments, potential transfer pricing adjustments, and state income taxes. The net amount of $8,002 million, if recognized, would favorably affect the company’s effective tax rate.
Financial Position
Dynamics
Our balance sheet at September 30, 2024 continues to provide us with financial flexibility to support and invest in the business.
Cash and cash equivalents, restricted cash and marketable securities at September 30, 2024 were $13,719 million, an increase of $257 million compared to December 31, 2023. Total debt of $56,579 million at September 30, 2024 was flat compared to December 31, 2023. We continue to manage our debt levels while being acquisitive and without sacrificing investments in our business.
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In the first nine months of 2024, we generated $9,115 million in cash from operating activities, a decrease of $353 million compared to the first nine months of 2023 due to a decrease in cash provided by financing receivables; partially offset by performance-related improvements within net income. Our free cash flow for the nine months ended September 30, 2024 was $6,586 million, an increase of $1,463 million versus the prior year. Refer to pages 80 through 81 for additional information on free cash flow. Our cash generation enables us to continue investing in innovation and expertise across the portfolio, while returning value to shareholders through dividends. We invested $2,748 million in acquisitions and we returned $4,601 million to shareholders through dividends in the first nine months of 2024.

Our pension plans were well funded at the end of 2023, with worldwide qualified plans funded at 111 percent. Overall pension funded status as of the end of September 2024 was fairly consistent with year-end 2023, as the transfer to the Insurer of approximately $6 billion of the Qualified PPP’s defined benefit pension obligations and related plan assets, reduced the company’s pension obligations and assets by the same amount. After the settlement and remeasurement, the Qualified PPP remained in an overfunded position at September 30, 2024. Refer to note 18, "Retirement-Related Benefits," for additional information.
IBM Working Capital
(Dollars in millions)At September 30, 2024At December 31, 2023
Current assets$30,543 $32,908 
Current liabilities28,853 34,122 
Working capital$1,690 $(1,214)
Current ratio1.06:10.96:1
Working capital increased $2,904 million from the year-end 2023 position. Current assets decreased $2,365 million ($2,257 million adjusted for currency) primarily in receivables mainly from collections of seasonally higher year-end balances. Current liabilities decreased $5,269 million ($5,228 million adjusted for currency) due to declines in short-term debt mainly due to maturities, accounts payable, and taxes payable.
Receivables and Allowances
Roll Forward of Total IBM Receivables Allowance for Credit Losses
(Dollars in millions)
January 1, 2024
Additions / (Releases) (1)
Write-offs (2)(3)
Foreign currency and other (3)
September 30, 2024
$457$(14)$(137)$(8)$298
(1)Additions/(Releases) for allowance for credit losses are recorded in expense.
(2)Refer to note A, “Significant Accounting Policies,” in our 2023 Annual Report for additional information regarding allowance for credit loss write-offs.
(3)Includes activity related to discontinued operations.
Excluding receivables classified as held for sale, the total IBM receivables provision coverage was 1.7 percent at September 30, 2024, a decrease of 50 basis points compared to December 31, 2023. The decrease in coverage is due to declines in reserves primarily driven by write-offs; partially offset by the overall decrease in total receivables. The majority of the write-offs during the year were related to receivables which had been previously reserved and were considered uncollectible as the related customer is no longer in operation, and/or there was no reasonable expectation of repossession or additional collections primarily due to their aging. In addition, it includes about $60 million of previously reserved receivables from discontinued operations that were written off in the current year. Refer to Financing's "Financial Position" on page 83 for additional details regarding the Financing segment receivables and allowances.
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Noncurrent Assets and Liabilities
(Dollars in millions)At September 30, 2024At December 31, 2023
Noncurrent assets$103,796 $102,333 
Long-term debt$52,980 $50,121 
Noncurrent liabilities (excluding debt)$27,976 $28,385 
The increase in noncurrent assets of $1,463 million ($1,516 million adjusted for currency) was primarily due to an increase in goodwill and intangible assets from the StreamSets and webMethods acquisition; partially offset by a decrease in long-term financing receivables as a result of declines from seasonally higher year-end balances.
Long-term debt increased $2,859 million ($2,738 million adjusted for currency) primarily driven by our first-quarter 2023 debt issuances; partially offset by reclassifications to short-term debt to reflect upcoming maturities.
Noncurrent liabilities (excluding debt) decreased $409 million ($419 million adjusted for currency) primarily driven by a decrease in retirement and nonpension postretirement benefit obligations.
Debt
Our funding requirements are continually monitored as we execute our strategies to manage the overall asset and liability profile. Additionally, we maintain sufficient flexibility to access global funding sources as needed.
(Dollars in millions)At September 30, 2024At December 31, 2023
Total debt$56,579 $56,547 
Financing segment debt (1)
$10,355 $11,879 
Non-Financing debt$46,224 $44,668 
(1)Refer to Financing’s “Financial Position” on page 83 for additional details.
Total debt of $56,579 million increased $32 million (decreased $74 million adjusted for currency) from December 31, 2023, primarily driven by maturities of $6,491 million; partially offset by proceeds from issuances of $5,705 million and currency impacts.
Non-Financing debt of $46,224 million increased $1,557 million ($1,395 million adjusted for currency) from December 31, 2023, primarily due to the first-quarter debt issuances; partially offset by maturities.

Financing segment debt of $10,355 million decreased $1,525 million ($1,469 million adjusted for currency) from December 31, 2023, primarily due to lower funding requirements associated with financing receivables.
Financing provides financing solutions predominantly for IBM’s external client assets, and the debt used to fund Financing assets is primarily comprised of intercompany loans. Total debt changes generally correspond with the level of client and commercial financing receivables, the level of cash and cash equivalents, the change in intercompany and external payables and the change in intercompany investment from IBM. The terms of the intercompany loans are set by the company to substantially match the term, currency and interest rate variability underlying the financing receivable. The Financing debt-to-equity ratio remained at 9.0 to 1 at September 30, 2024.
Interest expense relating to debt supporting Financing’s external client and internal business is included in the “Financing Results of Operations” and in note 4, “Segments.” In the Consolidated Income Statement, the external debt-related interest expense supporting Financing’s internal financing to the company is classified as interest expense.
Equity
Total equity increased $1,917 million from December 31, 2023, primarily driven by an increase from net income of $3,109 million which includes the impact of a one-time, non-cash pension settlement charge of $2,039 million net of tax, a
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decrease in accumulated other comprehensive loss of $2,343 million driven by retirement-related benefit plans primarily due to the pension settlement charge, and common stock issuances of $1,370 million; partially offset by dividends paid of $4,601 million.
Cash Flow
Our cash flows from operating, investing and financing activities, as reflected in the Consolidated Statement of Cash Flows on page 7, are summarized in the table below. These amounts also include the cash flows associated with the Financing business.
(Dollars in millions)
For the nine months ended September 30:20242023
Net cash provided by/(used in):  
Operating activities$9,115 $9,468 
Investing activities(3,558)(9,906)
Financing activities(5,403)(154)
Effect of exchange rate changes on cash, cash equivalents and restricted cash(29)(120)
Net change in cash, cash equivalents and restricted cash$125 $(713)
Net cash provided by operating activities decreased $353 million as compared to the first nine months of 2023. This was due to a decrease in cash provided by financing receivables; partially offset by performance-related improvements within net income. Changes in operating assets and liabilities, net of acquisitions/divestitures in the Consolidated Statement of Cash Flows also includes the tax effect related to the pension settlement charge in the third quarter of 2024, which represents a non-cash adjustment to reconcile net income/(loss) to cash from operating activities.
Net cash used in investing activities decreased $6,348 million primarily driven by lower net purchases of marketable securities and other investments, a decrease in cash used in acquisitions mainly driven by the Apptio acquisition in the previous year, partially offset by the StreamSets and webMethods acquisition in the current quarter, an increase in cash provided by divestitures from the sale of The Weather Company assets in the first quarter of 2024 and an increase in cash from disposition of property, plant and equipment/other mainly driven by proceeds from the sale of certain QRadar SaaS assets in the current quarter.
Net cash used in Financing activities increased by $5,249 million primarily driven by a higher level of net debt issuances in the prior-year period.
Looking Forward
Technology has proven to be a fundamental source of competitive advantage. Continued demand for technology will serve as a major driving force behind global economic and business growth as businesses look to scale, offer better services, drive efficiencies and seize new market opportunities. AI-driven productivity, in particular, continues to be a top priority for businesses for both cost reductions and new revenue opportunities.
Enterprise AI continues to gain traction. The AI portfolio we have built is designed to give clients a comprehensive set of tools and we believe we are well positioned to help clients scale AI. We have infused AI across the business, from the tools clients use to manage and optimize their hybrid cloud environments, to the tools to deploy AI within their enterprise, to Infrastructure and Consulting, there is AI innovation within all of our segments. For example, in Software, our broad suite of automation products such as Apptio and watsonx Orchestrate are leveraging AI. Red Hat is bringing AI to the platform with innovation such as OpenShift AI and RHEL AI. In Transaction Processing we are experiencing continued customer interest in our new generative AI product, watsonx Code Assistant for Z. In Infrastructure, IBM Z is equipped with real time AI inferencing capabilities. We continue to see Infrastructure play a larger role as clients bring AI to their data. In Consulting, our experts are helping clients design and execute AI strategies and are also leveraging AI technologies in the delivery of those services.
We are committed to an open innovation ecosystem around AI, to help our clients maximize flexibility and leverage skills, and IBM with Red Hat can be a key driver of open-source AI. Earlier this year, we open-sourced IBM’s Granite family of large language models and we see parallels to how Linux became dominant in the enterprise server space as a
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result of the speed and innovation offered by open source. Red Hat and IBM also launched InstructLab to evolve and improve AI models. Our partner ecosystem remains essential to both AI and hybrid cloud growth and we continue to progress strategic partnerships with industry leaders. In August, we completed the previously announced sale of certain IBM QRadar SaaS assets, which is part of a partnership to deliver AI-powered security solutions using watsonx with Palo Alto. The sale of these assets resulted in a benefit to cash from operating activities, cash from investing activities and to free cash flow in the third quarter. However, for full-year 2024 we expect only a nominal benefit to cash flows due to payments for structural actions we have taken and foregone profit from the QRadar business.
We continue to invest in emerging technologies, bringing new innovations to market. In early October 2024, we opened Europe’s first IBM Quantum Data Center. This is the second IBM quantum data center deployed globally which will greatly advance our goal of expanding access to the world’s most performant quantum computers. As we remain focused on portfolio optimization, we closed the divestiture of The Weather Company assets in January. To complement our portfolio, we completed eight acquisitions in the first nine months of 2024, including the acquisition of the StreamSets and webMethods assets from Software AG in July. This acquisition brings together leading capabilities in integration, API management and data ingestion.
On April 24, 2024, we announced our intent to acquire all of the outstanding shares of HashiCorp. The combination of IBM’s and HashiCorp’s combined portfolios will help clients manage growing application and infrastructure complexity and create a comprehensive end-to-end hybrid cloud platform designed for the AI era. Under the terms of the definitive agreement, HashiCorp shareholders on record immediately prior to the effective time on the closing date will receive $35 per share in cash, representing a total enterprise value of approximately $6.4 billion. On July 15, 2024, HashiCorp stockholders voted to approve the merger with IBM. The transaction is expected to close by the end of 2024, subject to regulatory approvals and other customary closing conditions. Upon closing, HashiCorp will be integrated into the Software segment.
In the first nine months of 2024, we continued to invest organically and inorganically, bring new products and innovation to market, expand our ecosystem and drive productivity across our business. Our performance over the first nine months of 2024 is a proof point of this progress. We have made solid progress in transitioning our portfolio to a higher growth, more focused business that has delivered sustained revenue growth and strong cash generation – a business well positioned for the future.
Retirement-Related Plans
In the fourth quarter of 2024, IBM Canada Ltd. (“IBMC”) purchased two separate nonparticipating single premium group annuity contracts from RBC Life Insurance Company ("RBC Insurance") and Brookfield Annuity Company ("Brookfield") (collectively the "Insurers") that will transfer to the Insurers approximately $1.2 billion of the IBMC IBM Retirement Plan’s (the “Plan”) defined benefit pension obligations for approximately 6,000 Plan participants and beneficiaries whose last province of employment was in British Columbia, Ontario or Quebec and who were receiving a payment under the Plan on July 1, 2024 (the “Transferred Participants”). The purchase of the group annuity contracts was completed October 29, 2024 and was funded directly by assets of the Plan and required no cash contribution from IBM.
Under the group annuity contracts, each insurer has made an irrevocable commitment, and will be solely responsible to pay the pension benefits of each Transferred Participant that are due on and after May 1, 2025 as follows: RBC Insurance will be responsible for 25 percent of the pension benefit and Brookfield will be responsible for 75 percent of the pension benefit. RBC Insurance will be the lead administrator. The transaction will result in no changes to the amount of benefits payable to the Transferred Participants.
As a result of the transaction, the company expects to recognize a one-time, non-cash, pre-tax, non-operating pension settlement charge of approximately $0.4 billion in the fourth quarter of 2024. The actual charge will depend on finalization of the actuarial and other assumptions. This charge will not impact the company’s fourth-quarter or full-year 2024 operating (non-GAAP) profit or free cash flow.
Our pension plans are well funded. Contributions for all retirement-related plans are expected to be approximately $1.4 billion in 2024, of which $0.1 billion generally relates to legally required contributions to non-U.S. defined benefit and multi-employer plans. The expected decrease of $0.4 billion in total contributions for 2024 is primarily driven by ongoing dynamics of our retirement-related plans, including the change in U.S. retirement-related benefits effective January 1, 2024 described in note 18, "Retirement-Related Benefits." We expect 2024 pre-tax retirement-related plan cost to be
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approximately $4.6 billion, an increase of approximately $3.4 billion compared to 2023, primarily driven by an increase in curtailments/settlements including the impact of a one-time, non-cash pension settlement charge in the third quarter of 2024 and the expected settlement charge associated with the transfer of a portion of IBM Canada's defined benefit pension obligations as described above, which was completed on October 29, 2024. Within total retirement-related plan cost, operating retirement-related plan cost is expected to be approximately $1.0 billion, a decrease of approximately $0.2 billion compared to 2023. Non-operating retirement-related plan cost is expected to be approximately $3.6 billion, an increase of approximately $3.6 billion compared to 2023, due to the pension charges described above and an increase in recognized actuarial losses, partially offset by lower interest costs.
Currency Rate Fluctuations
Changes in the relative values of non-U.S. currencies to the USD affect our financial results and financial position. At September 30, 2024, currency changes resulted in assets and liabilities denominated in most local currencies being translated into fewer dollars than at year-end 2023. We use financial hedging instruments to limit specific currency risks related to foreign currency-based transactions.
Movements in currency, and the fact that we do not hedge 100 percent of our currency exposures, will result in a currency impact to our revenues, profit and cash flows throughout 2024. We execute a hedging program which defers, versus eliminates, the volatility of currency impacts on our financial results. During periods of sustained movements in currency, the marketplace and competition adjust to the changing rates over time.
We translate revenue, cost and expense in our non-U.S. operations at current exchange rates in the reported period. References to “adjusted for currency” or “constant currency” reflect adjustments based upon a simple mathematical formula. However, this constant currency methodology that we utilize to disclose this information does not incorporate any operational actions that management could take to mitigate fluctuating currency rates.
Based on the currency rate movements in the third quarter of 2024, revenue from continuing operations increased 1.5 percent as reported and 2 percent at constant currency compared to the prior year. In the first nine months of 2024, revenue from continuing operations increased 1.6 percent as reported and 3 percent at constant currency, compared to the same period in 2023. In the third quarter of 2024, the impact from currency translation and hedging to year-to-year pre-tax income growth and operating (non-GAAP) pre-tax income growth was immaterial. In the first nine months of 2024, currency translation and hedging negatively impacted year-to-year pre-tax income growth and operating (non-GAAP) pre-tax income growth by approximately $200 million. From a segment perspective, in the third quarter of 2024, the impact from currency translation and hedging to our segments profit margin year-to-year growth was immaterial. In the first nine months of 2024, currency translation and hedging impacted our Infrastructure segment profit margin year-to-year growth by about half a point. We view these amounts as a theoretical maximum impact to our as-reported financial results. Hedging and certain underlying foreign currency transaction gains and losses are allocated to our segment results. Considering the operational responses mentioned above, movements of exchange rates, and the nature and timing of hedging instruments, it is difficult to predict future currency impacts on any particular period.
For non-U.S. subsidiaries and branches that operate in U.S. dollars or whose economic environment is highly inflationary, translation adjustments are reflected in results of operations. Generally, we manage currency risk in these entities by linking prices and contracts to U.S. dollars.

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Liquidity and Capital Resources
In our 2023 Annual Report, on pages 30 to 32, there is a discussion of our liquidity including two tables that present three years of data. The table presented on page 30 includes net cash from operating activities, cash and cash equivalents, restricted cash and short-term marketable securities, and the size of our global credit facilities for each of the past three years. For the nine months ended, or at, as applicable, September 30, 2024, those amounts are $9.1 billion of net cash from operating activities, $13.7 billion of cash and cash equivalents, restricted cash and short-term marketable securities and $10.0 billion in global credit facilities, respectively. While we have no current plans to draw on these credit facilities, they are available as back-up liquidity.
The major rating agencies' ratings on our debt securities at September 30, 2024 appear in the following table and remain unchanged from June 30, 2024.
IBM Ratings:Standard
and Poor's		Moody’s
Investors
Service		Fitch
Ratings
Senior long-term debtA-A3A-
Commercial paperA-2Prime-2F1
We have financial flexibility, supported by our strong liquidity position and cash flows, to operate at a single A credit rating. At September 30, 2024, our debt level was flat from December 31, 2023 driven by maturities; partially offset by proceeds from issuances and currency impacts.
We do not have “ratings trigger” provisions in our debt covenants or documentation, which would allow the holders to declare an event of default and seek to accelerate payments thereunder in the event of a change in credit rating. Our debt covenants are well within the required levels. Our contractual agreements governing derivative instruments contain standard market clauses which can trigger the termination of the agreement if our credit rating were to fall below investment grade. At September 30, 2024, the fair value of those instruments that were in a liability position was $500 million, before any applicable netting, and this position is subject to fluctuations in fair value period to period based on the level of our outstanding instruments and market conditions. We have no other contractual arrangements that, in the event of a change in credit rating, would result in a material adverse effect on our financial position or liquidity.
We prepare our Consolidated Statement of Cash Flows in accordance with applicable accounting standards for cash flow presentation on page 7 of this Form 10-Q and highlight causes and events underlying sources and uses of cash in that format on page 77. For the purpose of running its business, IBM manages, monitors and analyzes cash flows in a different manner.
Management uses free cash flow as a measure to evaluate its operating results, plan shareholder return levels, strategic investments and assess its ability and need to incur and service debt. The entire free cash flow amount is not necessarily available for discretionary expenditures. We define free cash flow as net cash from operating activities less the change in Financing receivables and net capital expenditures, including the investment in software and other asset sales (e.g., certain QRadar SaaS assets). A key objective of the Financing business is to generate strong returns on equity, and our Financing receivables are the basis for that growth. Accordingly, management considers Financing receivables as a profit-generating investment, not as working capital that should be minimized for efficiency. Therefore, management includes presentations of both free cash flow and net cash from operating activities that exclude the effect of Financing receivables.
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The following is management’s view of cash flows for the first nine months of 2024 and 2023 prepared in a manner consistent with the description above.
(Dollars in millions)
For the nine months ended September 30:20242023
Net cash from operating activities per GAAP$9,115 $9,468 
Less: change in Financing receivables1,824 3,119 
Net cash from operating activities, excluding Financing receivables$7,292 $6,349 
Capital expenditures, net (705)(1,226)
Free cash flow $6,586 $5,123 
Acquisitions(2,748)(4,945)
Divestitures705 (4)
Dividends(4,601)(4,522)
Non-Financing debt693 7,572 
Other (includes Financing net receivables and Financing debt)(379)(1,068)
Change in cash, cash equivalents, restricted cash and short-term marketable securities$257 $2,156 
In the first nine months of 2024, we generated $6.6 billion in free cash flow, an increase of $1.5 billion versus the prior-year period. The increase was primarily driven by performance-related improvements within net income and lower net capital expenditures driven by the cash proceeds from the sale of certain QRadar SaaS assets in the current quarter. Proceeds of $0.4 billion from the sale were included within capital expenditures, net and the remaining $0.1 billion were included within net cash from operating activities in the table above. Refer to note 5, “Acquisitions & Divestitures,” for additional information.

Events that could temporarily change the historical cash flow dynamics discussed previously and in our 2023 Annual Report include significant changes in operating results, material changes in geographic sources of cash, unexpected adverse impacts from litigation, future pension funding requirements, periods of severe downturn in the capital markets or the timing of tax payments. Whether any litigation has such an adverse impact will depend on a number of variables, which are more completely described in note 14, “Contingencies,” in this Form 10-Q. With respect to pension funding, we expect to make legally mandated pension plan contributions to certain non-U.S. defined benefit plans of approximately $100 million in 2024. Contributions related to all retirement-related plans are expected to be approximately $1.4 billion in 2024. Refer to "Retirement-Related Plans" for additional information. Financial market performance could increase the legally mandated minimum contributions in certain non-U.S. countries that require more frequent remeasurement of the funded status. We are not quantifying any further impact from pension funding because it is not possible to predict future movements in the capital markets or changes in pension plan funding regulations. In 2024, we are not legally required to make any contributions to the U.S. defined benefit pension plans.
Our cash flows are sufficient to fund our current operations and obligations, including investing and financing activities such as dividends and debt service. When additional requirements arise, we have several liquidity options available. These options may include the ability to borrow additional funds at reasonable interest rates and utilizing our committed global credit facilities. Our overall shareholder payout remains at a comfortable level and we remain fully committed to our long-standing dividend policy.
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Management Discussion – (continued)
Financing
Financing is a reportable segment that facilitates IBM clients’ acquisition of hardware, software and services by providing financing solutions, while generating solid returns on equity.
Results of Operations
(Dollars in millions)Yr.-to-Yr.
Percent
Change
For the three months ended September 30:20242023
Revenue$181 $186 (2.5)%
Segment profit (1)
$86 $91 (5.9)%

(Dollars in millions)Yr.-to-Yr.
Percent
Change
For the nine months ended September 30:20242023
Revenue$543 $566 (4.1)%
Segment profit (1)
$254 $256 (0.5)%
(1)Prior-year amounts recast to reflect January 2024 segment changes.
For the three months ended September 30, 2024, financing revenue decreased 2.5 percent as reported (1.3 percent adjusted for currency) compared to the prior-year period. For the nine months ended September 30, 2024, financing revenue decreased 4.1 percent as reported (3.1 percent adjusted for currency) compared to the prior-year period. These declines were primarily driven by a reduction in used equipment sales.
Financing segment profit decreased 5.9 percent to $86 million and 0.5 percent to $254 million in the third quarter and first nine months of 2024, respectively, compared to the prior-year period. The decreases in segment profit for both periods were primarily due to a reduction in used equipment sales. Financing segment profit margin decreased 1.7 points to 47.5 percent and increased 1.7 points to 46.9 percent in the third quarter and first nine months of 2024, respectively, compared to the prior-year period.

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Management Discussion – (continued)
Financial Position
(Dollars in millions)At September 30, 2024At December 31, 2023
Cash and cash equivalents$403 $555 
Client financing receivables:
Net investment in sales-type and direct financing leases (1)
3,792 4,237 
Client loans5,731 6,486 
Total client financing receivables$9,523 $10,723 
Commercial financing receivables:  
Held for investment670 1,155 
Held for sale509 692 
Other receivables15 26 
Total external receivables (2)
$10,716 $12,596 
Intercompany assets (3)
740 963 
Other assets211 294 
Total assets$12,070 $14,409 
Debt (4)
$10,355 $11,879 
Other liabilities (5) (6)
565 1,205 
Total liabilities (5)
$10,920 $13,085 
Total equity (5)
$1,151 $1,324 
Total liabilities and equity$12,070 $14,409 
(1)Includes deferred initial direct costs which are expensed in IBM’s consolidated financial results.
(2)The change in total external receivables of $1.9 billion and the $1.8 billion change in Financing segment’s receivables disclosed in the free cash flow presentation on page 81 is primarily attributable to currency impacts.
(3)Total amount is eliminated for purposes of IBM’s consolidated financial results and therefore does not appear in the Consolidated Balance Sheet.
(4)Financing segment debt is primarily comprised of intercompany loans.
(5)Prior-year amounts recast to reflect January 2024 segment change. Other liabilities have been reclassified to conform to the change in 2024 presentation.
(6)Includes intercompany payables of $0.4 billion at December 31, 2023. There were no intercompany payables outstanding at September 30, 2024. These intercompany payables were eliminated for purposes of IBM’s consolidated financial results.


Financing Segment Receivables and Allowances
The following table presents external Financing segment receivables excluding receivables classified as held for sale, and immaterial miscellaneous receivables.
(Dollars in millions)At September 30, 2024At December 31, 2023
Amortized cost (1)
$10,324 $12,034 
Specific allowance for credit losses104 111 
Unallocated allowance for credit losses27 45 
Total allowance for credit losses131 156 
Net financing receivables$10,193 $11,878 
Allowance for credit losses coverage1.3 %1.3 %
(1)Includes deferred initial direct costs which are expensed in IBM’s consolidated financial results.

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Management Discussion – (continued)
The percentage of Financing segment receivables reserved was 1.3 percent at both September 30, 2024 and December 31, 2023.
We continue to apply our rigorous credit policies. Approximately 75 percent of the total external portfolio was with investment grade clients, an increase of 3 points as compared to December 31, 2023. This investment grade percentage is based on the credit ratings of the companies in the portfolio and reflects certain mitigation actions taken to reduce the risk to IBM.

For additional information relating to the company's credit quality and mitigation actions, including sales of receivables, refer to note 9, “Financing Receivables.”
Return on Equity Calculation
For Three Months Ended September 30,For Nine Months Ended September 30,
(Dollars in millions)2024
2023 (1)
2024
2023 (1)
Numerator:  
Financing after-tax segment profit (2)
$70 $79 $207 $214 
Annualized after-tax segment profit (A)
$280 $315 $276 $285 
Denominator:    
Average Financing equity (B) (3)
$1,191 $1,137 $1,202 $1,219 
Financing return on equity (A)/(B)
23.5 %27.7 %23.0 %23.4 %
(1)Prior-year amounts recast to reflect January 2024 segment changes.
(2)Calculated based upon an estimated tax rate, which is a function of IBM’s provision for income taxes determined on a consolidated basis.
(3)Average of the ending equity for Financing for the last two quarters and four quarters, for the three months ended September 30 and for the nine months ended September 30, respectively.
Return on equity was 23.5 percent compared to 27.7 percent for the three months ended September 30, 2024, and 2023, respectively. The decrease was driven by a decrease in net income. Return on equity was 23.0 percent compared to 23.4 percent for the nine months ended September 30, 2024, and 2023, respectively. The decrease was primarily driven by a decrease in net income partially offset by a lower average equity balance.
Residual Value
The following table presents the recorded amount of unguaranteed residual value for sales-type and direct financing leases at September 30, 2024 and December 31, 2023. In addition, the table presents the run out of when the unguaranteed residual value assigned to equipment on leases at September 30, 2024 is expected to be returned to the company. The unguaranteed residual value for operating leases at September 30, 2024 and December 31, 2023 was not material. For additional information related to the company's residual value, refer to note A, "Significant Accounting Policies," in the company's 2023 Annual Report.

Unguaranteed Residual Value
At December 31, 2023At September 30,
2024		Estimated Run Out of September 30, 2024 Balance
(Dollars in millions)2024202520262027 and Beyond
Sales-type and direct financing leases$458 $457 $13 $133 $119 $191 


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Management Discussion – (continued)
GAAP Reconciliation
The tables below provide a reconciliation of our income statement results as reported under GAAP to our operating earnings presentation which is a non-GAAP measure. Management’s calculation of operating (non-GAAP) earnings, as presented, may differ from similarly titled measures reported by other companies. Refer to the “Operating (non-GAAP) Earnings” section for management’s rationale for presenting operating earnings information.
(Dollars in millions except per share amounts)GAAPAcquisition-
Related
Adjustments
Retirement-
Related
Adjustments (1)
U.S. Tax Reform
Impacts 		Operating
(non-GAAP)
For the three months ended September 30, 2024:
Gross profit$8,420 $192 $— $— $8,612 
Gross profit margin56.3 %1.3 pts. — pts. — pts. 57.5 %
SG&A$4,911 $(300)$— $— $4,611 
Other (income) and expense $2,244 $— $(2,797)$— $(553)
Total expense and other (income)
$9,222 $(300)$(2,797)$— $6,125 
Pre-tax income/(loss) from continuing operations$(802)$492 $2,797 $— $2,487 
Pre-tax margin from continuing operations(5.4)%3.3 pts. 18.7 pts. — pts. 16.6 %
Provision for/(benefit from) income taxes (2)
$(485)$119 $700 $(2)$332 
Effective tax rate60.4 %(7.2)pts. (39.8)pts. (0.1)pts. 13.4 %
Income/(loss) from continuing operations$(317)$373 $2,097 $2 $2,155 
Income/(loss) margin from continuing operations (2.1)%2.5 pts. 14.0 pts. 0.0 pts. 14.4 %
Diluted earnings/(loss) per share from continuing operations (3)
$(0.34)$0.40 $2.27 $0.00 $2.30 


(Dollars in millions except per share amounts)GAAPAcquisition-
Related
Adjustments		Retirement-
Related
Adjustments		U.S. Tax Reform
Impacts		Operating
(non-GAAP)
For the three months ended September 30, 2023:
Gross profit$8,023 $162 $— $— $8,185 
Gross profit margin54.4 %1.1 pts. — pts. — pts. 55.5 %
SG&A$4,458 $(277)$— $— $4,181 
Other (income) and expense$(215)$— $12 $— $(203)
Total expense and other (income)$6,150 $(277)$12 $— $5,885 
Pre-tax income from continuing operations$1,873 $438 $(12)$— $2,299 
Pre-tax margin from continuing operations12.7 %3.0 pts. (0.1)pts. — pts. 15.6 %
Provision for income taxes (2)
$159 $99 $(14)$24 $268 
Effective tax rate8.5 %2.7 pts. (0.5)pts. 1.0 pts. 11.7 %
Income from continuing operations$1,714 $340 $1 $(24)$2,031 
Income margin from continuing operations11.6 %2.3 pts. 0.0 pts. (0.2)pts. 13.8 %
Diluted earnings per share from continuing operations$1.86 $0.37 $0.00 $(0.03)$2.20 
(1)2024 includes the impact of a one-time, non-cash, pre-tax pension settlement charge of $2.7 billion ($2.0 billion net of tax). Refer to note 18, "Retirement-Related Benefits," for additional information.
(2)The tax impact on operating (non-GAAP) pre-tax income from continuing operations is calculated under the same accounting principles applied to the GAAP pre-tax income which employs an annual effective tax rate method to the results.
(3)Operating (non-GAAP) earnings per share was calculated using 938.4 million shares, which includes 14.9 million dilutive potential shares under our stock-based compensation plans and contingently issuable shares. Due to the GAAP net loss for the three months ended September 30, 2024, these dilutive potential shares were excluded from the GAAP loss per share calculation as the effect would have been antidilutive. The difference in share count resulted in an additional (0.04) reconciling item.



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Management Discussion – (continued)
(Dollars in millions except per share amounts)GAAPAcquisition-
Related
Adjustments
Retirement-
Related
Adjustments (1)
U.S. Tax Reform
Impacts (2)
Operating
(non-GAAP)
For the nine months ended September 30, 2024:
Gross profit$25,112 $533 $— $— $25,645 
Gross profit margin55.6 %1.2 pts. — pts. — pts. 56.7 %
SG&A$14,823 $(854)$— $— $13,969 
Other (income) and expense (3)
$1,694 $(68)$(2,991)$— $(1,364)
Total expense and other (income)
$22,621 $(922)$(2,991)$— $18,709 
Pre-tax income from continuing operations$2,491 $1,454 $2,991 $— $6,936 
Pre-tax margin from continuing operations5.5 %3.2 pts. 6.6 pts. — pts. 15.3 %
Provision for/(benefit from) income taxes (4)
$(597)$374 $731 $434 $942 
Effective tax rate(24.0)%10.4 pts. 20.9 pts. 6.3 pts. 13.6 %
Income from continuing operations$3,088 $1,081 $2,259 $(434)$5,994 
Income margin from continuing operations6.8 %2.4 pts. 5.0 pts. (1.0)pts. 13.3 %
Diluted earnings per share from continuing operations $3.30 $1.16 $2.42 $(0.46)$6.41 

(Dollars in millions except per share amounts)GAAPAcquisition-
Related
Adjustments		Retirement-
Related
Adjustments		U.S. Tax Reform
Impacts		Operating
(non-GAAP)
For the nine months ended September 30, 2023:   
Gross profit$24,033 $460 $— $— $24,492 
Gross profit margin54.0 %1.0 pts.— pts. — pts. 55.1 %
SG&A$14,212 $(768)$— $— $13,444 
Other (income) and expense$(721)$(2)$16 $— $(707)
Total expense and other (income)$19,102 $(770)$16 $— $18,348 
Pre-tax income from continuing operations$4,931 $1,229 $(16)$— $6,144 
Pre-tax margin from continuing operations11.1 %2.8 pts. 0.0 pts. — pts. 13.8 %
Provision for income taxes (4)
$702 $277 $(27)$(91)$861 
Effective tax rate14.2 %1.7 pts. (0.4)pts. (1.5)pts. 14.0 %
Income from continuing operations
$4,229 $953 $11 $91 $5,283 
Income margin from continuing operations
9.5 %2.1 pts. 0.0 pts. 0.2 pts. 11.9 %
Diluted earnings per share from continuing operations$4.59 $1.04 $0.01 $0.10 $5.74 
(1)2024 includes the impact of a one-time, non-cash, pre-tax pension settlement charge of $2.7 billion ($2.0 billion net of tax). Refer to note 18, "Retirement-Related Benefits," for additional information.
(2)2024 includes a benefit from income taxes due to the resolution of certain tax audit matters in the first quarter.
(3)Acquisition-Related Adjustments in 2024 includes a realized loss of $68 million on foreign exchange derivative contracts entered into by the company prior to the acquisition of StreamSets and webMethods from Software AG. Refer to note 16, “Derivative Financial Instruments,” for additional information.
(4)The tax impact on operating (non-GAAP) pre-tax income from continuing operations is calculated under the same accounting principles applied to the GAAP pre-tax income which employs an annual effective tax rate method to the results.
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Management Discussion – (continued)
Forward-Looking and Cautionary Statements
Except for the historical information and discussions contained herein, statements contained in this Form 10-Q may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on the company’s current assumptions regarding future business and financial performance. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially, including, but not limited to, the following: a downturn in economic environment and client spending budgets; a failure of the company’s innovation initiatives; damage to the company’s reputation; risks from investing in growth opportunities; failure of the company’s intellectual property portfolio to prevent competitive offerings and the failure of the company to obtain necessary licenses; the company’s ability to successfully manage acquisitions, alliances and dispositions, including integration challenges, failure to achieve objectives, the assumption of liabilities and higher debt levels; fluctuations in financial results; impact of local legal, economic, political, health and other conditions; the company’s failure to meet growth and productivity objectives; ineffective internal controls; the company’s use of accounting estimates; impairment of the company’s goodwill or amortizable intangible assets; the company’s ability to attract and retain key employees and its reliance on critical skills; impacts of relationships with critical suppliers; product quality issues; impacts of business with government clients; reliance on third party distribution channels and ecosystems; cybersecurity and data privacy considerations; adverse effects related to climate change and environmental matters; tax matters; legal proceedings and investigatory risks; the company’s pension plans; currency fluctuations and customer financing risks; impact of changes in market liquidity conditions and customer credit risk on receivables; potential failure of the separation of Kyndryl Holdings, Inc. to qualify for tax-free treatment; risk factors related to IBM securities; and other risks, uncertainties and factors discussed in the company’s Form 10-Qs, Form 10-K and in the company’s other filings with the U.S. Securities and Exchange Commission or in materials incorporated therein by reference. Any forward-looking statement in this Form 10-Q speaks only as of the date on which it is made. Except as required by law, the company assumes no obligation to update or revise any forward-looking statements.
Item 4. Controls and Procedures
The company’s management evaluated, with the participation of the Chief Executive Officer and Chief Financial Officer, the effectiveness of the company’s disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the company’s disclosure controls and procedures were effective as of the end of the period covered by this report. There has been no change in the company’s internal control over financial reporting that occurred during the quarter covered by this report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting.
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Part II — Other Information
Item 1. Legal Proceedings
Refer to note 14, “Contingencies,” in this Form 10-Q.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds and Issuer Repurchases of Equity Securities
The following table provides information relating to the company’s repurchase of common stock for the third quarter of 2024.
PeriodTotal Number
of Shares
Purchased		Average
Price Paid
per Share
Total Number
of Shares
Purchased as
Part of Publicly
Announced
Program
Approximate
Dollar Value
of Shares that
May Yet Be
Purchased Under
The Program (1)
July 1, 2024 - July 31, 2024—$— —$2,007,611,768 
August 1, 2024 - August 31, 2024—$— —$2,007,611,768 
September 1, 2024 - September 30, 2024—$— —$2,007,611,768 
Total—$— — 
(1)On October 30, 2018, the Board of Directors authorized $4.0 billion in funds for use in the company’s common stock repurchase program. The company stated that it would repurchase shares on the open market or in private transactions depending on market conditions. The common stock repurchase program does not have an expiration date. This table does not include shares tendered to satisfy the exercise price in connection with cashless exercises of employee stock options or shares tendered to satisfy tax withholding obligations in connection with employee equity awards. The company suspended its share repurchase program at the time of the Red Hat closing in 2019.
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Item 6. Exhibits
Exhibit Number
10.1
22
31.1
31.2
32.1
32.2
101.INSXBRL Instance Document – the instance document does not appear on the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCHXBRL Taxonomy Extension Schema Document
101.CALXBRL Taxonomy Extension Calculation Linkbase Document
101.DEFXBRL Taxonomy Extension Definition Linkbase Document
101.LABXBRL Taxonomy Extension Label Linkbase Document
101.PREXBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File – the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
International Business Machines Corporation
(Registrant)
Date: October 30, 2024
By:/s/ Nicolás A. Fehring
Nicolás A. Fehring
Vice President and Controller
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