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v3.25.1

Borrowings | 3 Months Ended
--- | ---
Mar. 31, 2025
Debt Disclosure [Abstract] |
Borrowings | Borrowings: Short-Term Debt The company's total short-term debt at March 31, 2025 and December 31, 2024 was $6,913 million and $5,089 million, respectively, and primarily consisted of current maturities of long-term debt detailed in “Long-Term Debt” below. Long-Term Debt Pre-Swap Borrowing
|  |  |  | Balance |  | Balance |  |
(Dollars in millions) |  | Maturities |  | 3/31/2025 |  | 12/31/2024 |  |
U.S. dollar debt (weighted-average interest rate at March 31, 2025): (1) |  |  |  |  |  |  |  |
5.1% |  | 2025 |  | $ | 1,600 |  |  | $ | 1,601 |  |  |
3.7% |  | 2026 |  | 5,800 |  |  | 5,800 |  |  |
3.3% |  | 2027 |  | 4,119 |  |  | 4,119 |  |  |
4.8% |  | 2028 |  | 2,313 |  |  | 1,313 |  |  |
3.6% |  | 2029 |  | 3,752 |  |  | 3,750 |  |  |
3.2% |  | 2030 |  | 2,356 |  |  | 1,350 |  |  |
4.8% |  | 2031 |  | 500 |  |  | 500 |  |  |
4.6% |  | 2032 |  | 2,700 |  |  | 1,850 |  |  |
4.8% |  | 2033 |  | 750 |  |  | 750 |  |  |
4.9% |  | 2034 |  | 1,000 |  |  | 1,000 |  |  |
5.2% |  | 2035 |  | 900 |  |  | — |  |  |
8.0% |  | 2038 |  | 83 |  |  | 83 |  |  |
4.5% |  | 2039 |  | 2,745 |  |  | 2,745 |  |  |
2.9% |  | 2040 |  | 650 |  |  | 650 |  |  |
4.0% |  | 2042 |  | 1,107 |  |  | 1,107 |  |  |
5.3% |  | 2044 |  | 1,000 |  |  | 1,000 |  |  |
7.0% |  | 2045 |  | 27 |  |  | 27 |  |  |
4.7% |  | 2046 |  | 650 |  |  | 650 |  |  |
4.3% |  | 2049 |  | 3,000 |  |  | 3,000 |  |  |
3.0% |  | 2050 |  | 750 |  |  | 750 |  |  |
4.2% |  | 2052 |  | 1,400 |  |  | 1,400 |  |  |
5.1% |  | 2053 |  | 650 |  |  | 650 |  |  |
5.3% |  | 2054 |  | 1,400 |  |  | 1,400 |  |  |
5.7% |  | 2055 |  | 1,000 |  |  | — |  |  |
7.1% |  | 2096 |  | 316 |  |  | 316 |  |  |
|  |  |  | $ | 40,569 |  |  | $ | 35,813 |  |  |
Euro debt (weighted-average interest rate at March 31, 2025): (1) |  |  |  |  |  |  |  |
1.9% |  | 2025 |  | $ | 2,160 |  |  | $ | 3,106 |  |  |
2.3% |  | 2027 |  | 2,160 |  |  | 2,071 |  |  |
0.7% |  | 2028 |  | 1,944 |  |  | 1,863 |  |  |
1.5% |  | 2029 |  | 1,080 |  |  | 1,035 |  |  |
1.7% |  | 2030 |  | 1,890 |  |  | 1,035 |  |  |
2.7% |  | 2031 |  | 2,701 |  |  | 2,588 |  |  |
0.7% |  | 2032 |  | 1,728 |  |  | 1,656 |  |  |
3.2% |  | 2033 |  | 1,188 |  |  | — |  |  |
1.3% |  | 2034 |  | 1,080 |  |  | 1,035 |  |  |
3.8% |  | 2035 |  | 1,080 |  |  | 1,035 |  |  |
3.5% |  | 2037 |  | 972 |  |  | — |  |  |
1.2% |  | 2040 |  | 918 |  |  | 880 |  |  |
4.0% |  | 2043 |  | 1,080 |  |  | 1,035 |  |  |
3.8% |  | 2045 |  | 810 |  |  | — |  |  |
|  |  |  | $ | 20,794 |  |  | $ | 17,340 |  |  |
Other currencies (weighted-average interest rate at March 31, 2025): (1) |  |  |  |  |  |  |  |
Pound sterling (4.9%) |  | 2038 |  | $ | 968 |  |  | $ | 939 |  |  |
Japanese yen (0.9%) |  | 2026–2028 |  | 849 |  |  | 808 |  |  |
Other (13.8%) |  | 2025–2027 |  | 189 |  |  | 212 |  |  |
|  |  |  | $ | 63,369 |  |  | $ | 55,111 |  |  |
Finance lease obligations (4.9% weighted-average interest rate at March 31, 2025) |  | 2025–2034 |  | 1,031 |  |  | 1,000 |  |  |
|  |  |  | $ | 64,400 |  |  | $ | 56,112 |  |  |
Less: net unamortized discount |  |  |  | 829 |  |  | 824 |  |  |
Less: net unamortized debt issuance costs |  |  |  | 198 |  |  | 168 |  |  |
Add: fair value adjustment (2) |  |  |  | (90) |  |  | (176) |  |  |
|  |  |  | $ | 63,283 |  |  | $ | 54,943 |  |  |
Less: current maturities |  |  |  | 6,912 |  |  | 5,059 |  |  |
Total |  |  |  | $ | 56,371 |  |  | $ | 49,884 |  |  |
(1)Includes notes, debentures, bank loans and secured borrowings. (2)The portion of the company’s fixed-rate debt obligations that is hedged is reflected in the Consolidated Balance Sheet as an amount equal to the sum of the debt’s carrying value and a fair value adjustment representing changes in the fair value of the hedged debt obligations attributable to movements in benchmark interest rates. The company’s indenture governing its debt securities and its various credit facilities each contain significant covenants which obligate the company to promptly pay principal and interest, limit the aggregate amount of secured indebtedness and sale and leaseback transactions to 10 percent of the company’s consolidated net tangible assets, and restrict the company’s ability to merge or consolidate unless certain conditions are met. The credit facilities also include a covenant on the company’s consolidated net interest expense ratio, which cannot be less than 2.20 to 1.0, as well as a cross default provision with respect to other defaulted indebtedness of at least $500 million. The company is in compliance with its debt covenants and provides periodic certifications to its lenders. The failure to comply with its debt covenants could constitute an event of default with respect to the debt to which such provisions apply. If certain events of default were to occur, the principal and interest on the debt to which such event of default applied would become immediately due and payable. In the first quarter of 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. 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. On February 10, 2025, the company issued $3.6 billion of Euro fixed-rate notes in tranches with maturities ranging from 5 to 20 years and coupons ranging from 2.9 to 3.8 percent; and $4.75 billion of U.S. dollar fixed-rate notes in tranches with maturities ranging from 3 to 30 years and coupons ranging from 4.65 to 5.7 percent. Pre-swap annual contractual obligations of long-term debt outstanding at March 31, 2025, were as follows:
(Dollars in millions) |  | Total
Remainder of 2025 |  | $ | 4,033 |
2026 |  | 6,336 |
2027 |  | 6,462 |
2028 |  | 4,986 |
2029 |  | 4,985 |
Thereafter |  | 37,598 |
Total |  | $ | 64,400 |
Interest on Debt
(Dollars in millions) |  |  |  |
For the three months ended March 31: |  | 2025 |  | 2024
Cost of financing |  | $ | 87 |  |  | $ | 85 |
Interest expense |  | 455 |  |  | 432 |
Interest capitalized |  | 2 |  |  | 2 |
Total interest paid and accrued |  | $ | 544 |  |  | $ | 519 |
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 March 31, 2025, there were no borrowings by the company, or its subsidiaries, under these credit facilities.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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