Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities, Classification
Adjustments to Financial Statements: Removal of Deferred Taxes
Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

International Business Machines Corp., income tax expense (benefit), continuing operations

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
U.S. federal	560)	391)	374)	315)	331)
U.S. state and local	127)	184)	161)	316)	(85)
Non-U.S.	1,594)	1,676)	1,342)	1,827)	1,829)
Current	2,281)	2,251)	1,877)	2,458)	2,075)
U.S. federal	(1,371)	(2,643)	(1,358)	1,177)	(839)
U.S. state and local	(162)	(486)	(370)	(315)	(82)
Non-U.S.	428)	252)	(25)	(4,184)	(423)
Deferred	(1,105)	(2,877)	(1,753)	(3,322)	(1,344)
Continuing operations provision for (benefit from) income taxes	1,176)	(626)	124)	(864)	731)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

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Item	Description	The company
Current	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	International Business Machines Corp. current increased from 2021 to 2022 and from 2022 to 2023.
Deferred	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	International Business Machines Corp. deferred decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.
Continuing operations provision for (benefit from) income taxes	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	International Business Machines Corp. continuing operations provision for (benefit from) income taxes decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

International Business Machines Corp., effective income tax rate (EITR) reconciliation

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Statutory U.S. federal tax rate	21.00%	21.00%	21.00%	21.00%	21.00%
Tax differential on foreign income	-3.00%	-29.00%	-10.00%	-15.00%	-11.00%
Intra-entity IP sale	0.00%	0.00%	0.00%	-20.00%	0.00%
Domestic incentives	-5.00%	-24.00%	-5.00%	-4.00%	-2.00%
State and local	0.00%	-21.00%	-3.00%	0.00%	-1.00%
Other	1.00%	-1.00%	0.00%	-1.00%	-1.00%
Effective tax rate, before enactment of U.S. tax reform	14.00%	-54.00%	3.00%	-19.00%	6.00%
Enactment of U.S. tax reform	0.00%	0.00%	0.00%	0.00%	1.00%
Effective tax rate	14.00%	-54.00%	3.00%	-19.00%	7.00%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

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Item	Description	The company
Effective tax rate, before enactment of U.S. tax reform	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	International Business Machines Corp. effective tax rate, before enactment of U.S. tax reform decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

International Business Machines Corp., components of deferred tax assets and liabilities

US$ in millions

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Retirement benefits	2,269)	1,954)	3,142)	3,946)	3,766)
Leases	1,055)	927)	1,061)	1,525)	1,729)
Share-based and other compensation	720)	608)	661)	616)	637)
Domestic tax loss/credit carryforwards	2,194)	1,798)	1,619)	1,746)	1,259)
Deferred income	682)	633)	630)	712)	600)
Foreign tax loss/credit carryforwards	651)	845)	983)	818)	836)
Bad debt, inventory and warranty reserves	305)	383)	390)	361)	298)
Depreciation	205)	247)	249)	308)	253)
Restructuring charges	94)	101)	216)	302)	138)
Accruals	253)	215)	305)	483)	368)
Intangible assets	2,774)	2,879)	2,929)	3,540)	592)
Capitalized research and development	3,524)	3,012)	2,161)	1,387)	722)
Other	1,142)	1,157)	1,306)	2,017)	1,300)
Gross deferred tax assets	15,868)	14,759)	15,652)	17,761)	12,498)
Valuation allowance	(765)	(770)	(883)	(850)	(608)
Net deferred tax assets	15,103)	13,989)	14,769)	16,911)	11,890)
Goodwill and intangible assets	(3,054)	(3,156)	(3,306)	(3,686)	(4,186)
GILTI deferred taxes	(2,195)	(2,483)	(3,257)	(4,365)	(1,908)
Leases and right-of-use assets	(1,369)	(1,174)	(1,314)	(1,908)	(2,216)
Depreciation	(523)	(505)	(518)	(709)	(728)
Retirement benefits	(1,443)	(1,609)	(1,971)	(1,221)	(1,002)
Deferred transition costs	(47)	(56)	(42)	(205)	(233)
Undistributed foreign earnings	(192)	(87)	(131)	(307)	(725)
Other	(770)	(955)	(817)	(741)	(940)
Gross deferred tax liabilities	(9,593)	(10,025)	(11,356)	(13,142)	(11,938)
Net deferred tax assets (liabilities)	5,510)	3,964)	3,413)	3,769)	(48)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

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Item	Description	The company
Gross deferred tax assets	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	International Business Machines Corp. gross deferred tax assets decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.
Net deferred tax assets	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	International Business Machines Corp. net deferred tax assets decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.
Net deferred tax assets (liabilities)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	International Business Machines Corp. net deferred tax assets (liabilities) increased from 2021 to 2022 and from 2022 to 2023.

International Business Machines Corp., deferred tax assets and liabilities, classification

US$ in millions

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
	Deferred tax assets	6,656)	6,256)	7,370)	9,241)	5,182)
	Deferred tax liabilities	1,146)	2,292)	3,956)	5,472)	5,230)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

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Item	Description	The company
Deferred tax assets	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent.	International Business Machines Corp. deferred tax assets decreased from 2021 to 2022 but then slightly increased from 2022 to 2023.
Deferred tax liabilities	Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent.	International Business Machines Corp. deferred tax liabilities decreased from 2021 to 2022 and from 2022 to 2023.

International Business Machines Corp., adjustments to financial statements

US$ in millions

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Adjustment to Total Assets
Total assets (as reported)	135,241)	127,243)	132,001)	155,971)	152,186)
Less: Noncurrent deferred tax assets, net	6,656)	6,256)	7,370)	9,241)	5,182)
Total assets (adjusted)	128,585)	120,987)	124,631)	146,730)	147,004)
Adjustment to Total Liabilities
Total liabilities (as reported)	112,628)	105,222)	113,005)	135,244)	131,202)
Less: Noncurrent deferred tax liabilities, net	1,146)	2,292)	3,956)	5,472)	5,230)
Total liabilities (adjusted)	111,482)	102,930)	109,049)	129,772)	125,972)
Adjustment to Total IBM Stockholders’ Equity
Total IBM stockholders’ equity (as reported)	22,533)	21,944)	18,901)	20,597)	20,841)
Less: Net deferred tax assets (liabilities)	5,510)	3,964)	3,413)	3,769)	(48)
Total IBM stockholders’ equity (adjusted)	17,023)	17,980)	15,488)	16,828)	20,889)
Adjustment to Net Income Attributable To IBM
Net income attributable to IBM (as reported)	7,502)	1,639)	5,743)	5,590)	9,431)
Add: Deferred income tax expense (benefit)	(1,105)	(2,877)	(1,753)	(3,322)	(1,344)
Net income attributable to IBM (adjusted)	6,397)	(1,238)	3,990)	2,268)	8,087)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

International Business Machines Corp., Financial Data: Reported vs. Adjusted

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International Business Machines Corp., adjusted financial ratios

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net Profit Margin
Reported net profit margin	12.13%	2.71%	10.01%	7.59%	12.22%
Adjusted net profit margin	10.34%	-2.05%	6.96%	3.08%	10.48%
Total Asset Turnover
Reported total asset turnover	0.46	0.48	0.43	0.47	0.51
Adjusted total asset turnover	0.48	0.50	0.46	0.50	0.52
Financial Leverage
Reported financial leverage	6.00	5.80	6.98	7.57	7.30
Adjusted financial leverage	7.55	6.73	8.05	8.72	7.04
Return on Equity (ROE)
Reported ROE	33.29%	7.47%	30.38%	27.14%	45.25%
Adjusted ROE	37.58%	-6.89%	25.76%	13.48%	38.71%
Return on Assets (ROA)
Reported ROA	5.55%	1.29%	4.35%	3.58%	6.20%
Adjusted ROA	4.97%	-1.02%	3.20%	1.55%	5.50%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Financial ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	International Business Machines Corp. adjusted net profit margin ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	International Business Machines Corp. adjusted total asset turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	International Business Machines Corp. adjusted financial leverage ratio decreased from 2021 to 2022 but then increased from 2022 to 2023 not reaching 2021 level.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	International Business Machines Corp. adjusted ROE deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	International Business Machines Corp. adjusted ROA deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

International Business Machines Corp., Financial Ratios: Reported vs. Adjusted

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	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to IBM	7,502)	1,639)	5,743)	5,590)	9,431)
Revenue	61,860)	60,530)	57,350)	73,620)	77,147)
Profitability Ratio
Net profit margin¹	12.13%	2.71%	10.01%	7.59%	12.22%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to IBM	6,397)	(1,238)	3,990)	2,268)	8,087)
Revenue	61,860)	60,530)	57,350)	73,620)	77,147)
Profitability Ratio
Adjusted net profit margin²	10.34%	-2.05%	6.96%	3.08%	10.48%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ Net profit margin = 100 × Net income attributable to IBM ÷ Revenue
= 100 × 7,502 ÷ 61,860 = 12.13%

² Adjusted net profit margin = 100 × Adjusted net income attributable to IBM ÷ Revenue
= 100 × 6,397 ÷ 61,860 = 10.34%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	International Business Machines Corp. adjusted net profit margin ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Revenue	61,860)	60,530)	57,350)	73,620)	77,147)
Total assets	135,241)	127,243)	132,001)	155,971)	152,186)
Activity Ratio
Total asset turnover¹	0.46	0.48	0.43	0.47	0.51
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Revenue	61,860)	60,530)	57,350)	73,620)	77,147)
Adjusted total assets	128,585)	120,987)	124,631)	146,730)	147,004)
Activity Ratio
Adjusted total asset turnover²	0.48	0.50	0.46	0.50	0.52

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ Total asset turnover = Revenue ÷ Total assets
= 61,860 ÷ 135,241 = 0.46

² Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 61,860 ÷ 128,585 = 0.48

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	International Business Machines Corp. adjusted total asset turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023.

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Total assets	135,241)	127,243)	132,001)	155,971)	152,186)
Total IBM stockholders’ equity	22,533)	21,944)	18,901)	20,597)	20,841)
Solvency Ratio
Financial leverage¹	6.00	5.80	6.98	7.57	7.30
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets	128,585)	120,987)	124,631)	146,730)	147,004)
Adjusted total IBM stockholders’ equity	17,023)	17,980)	15,488)	16,828)	20,889)
Solvency Ratio
Adjusted financial leverage²	7.55	6.73	8.05	8.72	7.04

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ Financial leverage = Total assets ÷ Total IBM stockholders’ equity
= 135,241 ÷ 22,533 = 6.00

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total IBM stockholders’ equity
= 128,585 ÷ 17,023 = 7.55

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	International Business Machines Corp. adjusted financial leverage ratio decreased from 2021 to 2022 but then increased from 2022 to 2023 not reaching 2021 level.

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to IBM	7,502)	1,639)	5,743)	5,590)	9,431)
Total IBM stockholders’ equity	22,533)	21,944)	18,901)	20,597)	20,841)
Profitability Ratio
ROE¹	33.29%	7.47%	30.38%	27.14%	45.25%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to IBM	6,397)	(1,238)	3,990)	2,268)	8,087)
Adjusted total IBM stockholders’ equity	17,023)	17,980)	15,488)	16,828)	20,889)
Profitability Ratio
Adjusted ROE²	37.58%	-6.89%	25.76%	13.48%	38.71%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ ROE = 100 × Net income attributable to IBM ÷ Total IBM stockholders’ equity
= 100 × 7,502 ÷ 22,533 = 33.29%

² Adjusted ROE = 100 × Adjusted net income attributable to IBM ÷ Adjusted total IBM stockholders’ equity
= 100 × 6,397 ÷ 17,023 = 37.58%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	International Business Machines Corp. adjusted ROE deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to IBM	7,502)	1,639)	5,743)	5,590)	9,431)
Total assets	135,241)	127,243)	132,001)	155,971)	152,186)
Profitability Ratio
ROA¹	5.55%	1.29%	4.35%	3.58%	6.20%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to IBM	6,397)	(1,238)	3,990)	2,268)	8,087)
Adjusted total assets	128,585)	120,987)	124,631)	146,730)	147,004)
Profitability Ratio
Adjusted ROA²	4.97%	-1.02%	3.20%	1.55%	5.50%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ ROA = 100 × Net income attributable to IBM ÷ Total assets
= 100 × 7,502 ÷ 135,241 = 5.55%

² Adjusted ROA = 100 × Adjusted net income attributable to IBM ÷ Adjusted total assets
= 100 × 6,397 ÷ 128,585 = 4.97%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	International Business Machines Corp. adjusted ROA deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

International Business Machines Corp. (NYSE:IBM)

Analysis of Income Taxes

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Deferred Tax Assets and Liabilities, Classification

Adjustments to Financial Statements: Removal of Deferred Taxes

International Business Machines Corp., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

International Business Machines Corp., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)