10q10k10q10k.net

What changed in IBM's 10-K — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of IBM's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+61 added−56 removedSource: 10-K (2024-02-26) vs 10-K (2023-02-28)

Top changes in IBM's 2023 10-K

61 paragraphs added · 56 removed · 53 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

14 edited+1 added−1 removed14 unchanged
Biggest changeThe following information is included in IBM’s 2022 Annual Report to Stockholders and is incorporated herein by reference: Segment information and revenue by classes of similar products or services—pages 70 to 73. Financial information regarding environmental activities—page 95. The number of persons employed by the registrant—page 15. The management discussion overview—pages 8 to 10. Website information and company reporting—page 122.
Biggest changeFinancial information regarding environmental activities—page 94. The number of persons employed by the registrant—page 15. The management discussion overview—pages 8 to 10. Website information and company reporting—page 123. Information About Our Executive Officers (at February 26, 2024): Age Officer since Arvind Krishna, Chairman of the Board and Chief Executive Officer (1) 61 2020 Michelle H.
We also compete with smaller, niche competitors in specific geographic regions or product segments. Consulting: Consulting focuses on integrating skills on strategy, experience, technology and operations by domain and industry. Consulting competes in a dynamic market including consulting, systems integration, application management and business process outsourcing services.
We also compete with smaller, niche competitors in specific geographic regions or product segments. Consulting: Consulting focuses on integrating skills on strategy, experience, technology and operations by domain and industry. Consulting competes in a dynamic market including consulting, systems integration, application development, application management and business process outsourcing services.
Since that time, IBM has focused on the intersection of business insight and technological innovation, and its operations and aims have been international in nature. This was signaled almost 100 years ago, in 1924, when C-T-R changed its name to International Business Machines Corporation.
Since that time, IBM has focused on the intersection of business insight and technological innovation, and its operations and aims have been international in nature. This was signaled 100 years ago, in 1924, when C-T-R changed its name to International Business Machines Corporation.
Business Segments and Capabilities—pages 14 to 15. Human Capital—pages 15 to 16. Strategic Partnerships We proactively partner with a broad variety of companies including hyperscalers, service providers, global system integrators, and software and hardware vendors. We work alongside our partners to deliver end-to-end solutions that address our clients’ complex business challenges while accelerating growth.
Business Segments and Capabilities—pages 13 to 15. Human Capital—pages 15 to 16. Strategic Partnerships We proactively partner with a broad variety of companies including hyperscalers, service providers, global system integrators, and software and hardware vendors. We work alongside our partners to deliver end-to-end solutions that address our clients’ complex business challenges while accelerating growth.
Our principal competitors include: Dell Technologies, Hewlett-Packard Enterprise (HPE), Intel, NetApp and Pure Storage as well as original device manufacturers (ODMs) who provide systems that are re-branded. Further, cloud service providers are leveraging innovation in technology and service delivery to compete with traditional providers and to offer new routes to market for server and storage systems.
Our principal competitors include: Dell Technologies, Hewlett-Packard Enterprise (HPE), Intel, NetApp and Pure Storage as well as original device manufacturers (ODMs) who provide systems that are re-branded. Further, cloud service providers are leveraging innovation in technology and service delivery to compete with traditional providers and to offer additional routes to market for server and storage systems.
Our offerings draw from leading IBM capabilities in software, consulting services capability to deliver business outcomes, and deep incumbency in mission-critical infrastructure, all bolstered by one of the world’s leading research organizations. The following information is included in IBM’s 2022 Annual Report to Stockholders and is incorporated by reference: IBM Strategy—pages 11 to 13.
Our offerings draw from leading IBM capabilities in software, consulting services capability to deliver business outcomes, and deep incumbency in mission-critical infrastructure, all bolstered by one of the world’s leading research organizations. The following information is included in IBM’s 2023 Annual Report to Stockholders and is incorporated by reference: IBM Strategy—pages 11 to 13.
Financing: Financing provides client and commercial financing, facilitating IBM clients’ acquisition of IT systems, software and services. Financing’s ability to manage credit and residual value risk generates a competitive advantage for the company. The key competitive factors include: interest rates charged, IT product experience, client service, contract flexibility, ease of doing business, global capabilities and residual values.
Financing: Financing provides client and commercial financing, facilitating IBM clients’ acquisition of hardware, software and services. Financing’s ability to manage credit and residual value risk generates a competitive advantage for the company. The key competitive factors include: interest rates charged, IT product experience, client service, contract flexibility, ease of doing business, global capabilities and residual values.
Our strategic partners include: Adobe, Amazon Web Services (AWS), Cisco Systems, Microsoft, Oracle, Salesforce, Samsung Electronics and SAP, among others. Companies with which we have strategic partnerships in some areas may be competitors in other areas. Competition IBM is a globally integrated enterprise that participates in a highly competitive environment.
Our strategic partners include: Adobe, Amazon Web Services (AWS), Microsoft, Oracle, Salesforce, Samsung Electronics and SAP, among others. Companies with which we have strategic partnerships in some areas may be competitors in other areas. Competition IBM is a globally integrated enterprise that participates in a highly competitive environment.
“Risk Factors” on pages 3 to 10 are cautionary statements that accompany those forward-looking statements. Readers should carefully review such cautionary statements as they identify certain 2 Table of Contents important factors that could cause actual results to differ materially from those in the forward-looking statements and from historical trends.
“Risk Factors” on pages 3 to 9 are cautionary statements that accompany those forward-looking statements. Readers should carefully review such cautionary statements as they identify certain important factors that could cause actual results to differ materially from those in the forward-looking statements and from historical trends.
Our hybrid cloud platform based on open technologies allows clients to realize their digital and AI transformations across the applications, data, and environments in which they operate. The principal competitors in this segment include: Alphabet (Google), Amazon, BMC, Broadcom, Cisco Systems, Informatica, Microsoft, Oracle, Palo Alto Networks, Salesforce, SAP, Splunk and VMware.
Our hybrid cloud and AI platforms allow clients to realize their digital and AI transformations across the applications, data, and environments in which they operate. The principal competitors in this segment include: Alphabet (Google), Amazon, BMC, Broadcom, Informatica, Microsoft, Oracle, Palo Alto Networks, Salesforce, SAP and Splunk.
Cohn previously served as Assistant to the President for Economic Policy and Director of the National Economic Council from January 2017 until April 2018. Before serving in the White House, Mr. Cohn was President and Chief Operating Officer of The Goldman Sachs Group, Inc. from 2006-2016. ​ ​
Cohn, has been an executive of IBM or its subsidiaries during the past five years. Mr. Cohn previously served as Assistant to the President for Economic Policy and Director of the National Economic Council from January 2017 until April 2018. Before serving in the White House, Mr.
Those cautionary statements are not exclusive and are in addition to other factors discussed elsewhere in this Form 10-K, in the company’s filings with the SEC or in materials incorporated therein by reference.
Those cautionary statements are not exclusive and are in addition to other factors discussed elsewhere in this Form 10-K, in the company’s filings with the SEC or in materials incorporated therein by reference. 2 Table of Contents The following information is included in IBM’s 2023 Annual Report to Stockholders and is incorporated herein by reference: Segment information and revenue by classes of similar products or services—pages 66 to 70.
All executive officers are elected by the Board of Directors annually as provided in the Company’s By-laws. Each executive officer named above, with the exception of Gary D. Cohn, has been an executive of IBM or its subsidiaries during the past five years. Mr.
Thomas, Senior Vice President, Software and Chief Commercial Officer 49 2023 (1) Member of the Board of Directors. All executive officers are elected by the Board of Directors annually as provided in the Company’s By-laws. Each executive officer named above, with the exception of Gary D.
Fehring, Vice President and Controller ​ 44 ​ 2023 James J. Kavanaugh, Senior Vice President and Chief Financial Officer, Finance and Operations ​ 56 ​ 2008 Nickle J. LaMoreaux, Senior Vice President and Chief Human Resources Officer ​ 43 ​ 2020 Tom Rosamilia, Senior Vice President and Senior Advisor ​ 62 ​ 2021 * Member of the Board of Directors.
Browdy, Senior Vice President, Legal and Regulatory Affairs, and General Counsel 59 2015 Gary D. Cohn, Vice Chairman 63 2021 Nicolas A. Fehring, Vice President and Controller 45 2023 James J. Kavanaugh, Senior Vice President and Chief Financial Officer, Finance and Operations 57 2008 Nickle J. LaMoreaux, Senior Vice President and Chief Human Resources Officer 44 2020 Robert D.
Removed
Information About Our Executive Officers (at February 28, 2023): ​ ​ ​ ​ ​ ​ Age Officer since Arvind Krishna, Chairman of the Board and Chief Executive Officer* ​ 60 ​ 2020 Michelle H. Browdy, Senior Vice President, Legal and Regulatory Affairs, and General Counsel ​ 58 ​ 2015 Gary D. Cohn, Vice Chairman ​ 62 ​ 2021 Nicolas A.
Added
Cohn was President and Chief Operating Officer of The Goldman Sachs Group, Inc. from 2006-2016.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

31 edited+7 added−1 removed72 unchanged
Biggest changeIf IBM is unable to continue its cutting-edge innovation in a highly competitive and rapidly evolving environment or is unable to commercialize such innovations, expand and scale them with sufficient speed and versatility or is unable to attract a successful developer ecosystem, the company could fail in its ongoing efforts to maintain and increase its market share and its profit margins. 3 Table of Contents Damage to IBM’s Reputation Could Impact the Company’s Business: IBM has one of the strongest brand names in the world, and its brand and overall reputation could be negatively impacted by many factors, including if the company does not continue to be recognized for its industry leading technology and solutions and as a hybrid cloud and AI leader.
Biggest changeIf IBM is unable to continue its cutting-edge innovation in a highly competitive and rapidly evolving environment or is unable to commercialize such innovations, expand and scale them with sufficient speed and versatility or is unable to attract a successful developer ecosystem, the company could fail in its ongoing efforts to maintain and increase its market share and its profit margins.
Further, as the company expands its customer base and the scope of its offerings, both within the U.S. and globally, it may be impacted by additional regulatory or other risks, including, compliance with U.S. and foreign data privacy requirements, data localization requirements, labor relations laws, enforcement of IP protection laws, laws relating to anti-corruption, anti-competition regulations, and import, export and trade restrictions.
Further, as the company expands its customer base and the scope of its offerings, both within the U.S. and globally, it may be impacted by additional regulatory or other risks, including, compliance with U.S. and foreign data privacy requirements, AI regulations, data localization requirements, labor relations laws, enforcement of IP protection laws, laws relating to anti-corruption, anti-competition regulations, and import, export and trade restrictions.
Local country, state, provincial or municipal taxation may also be subject to review and potential override by regional, federal, national or similar forms of government. In addition, IBM is subject to the continuous examination of its income tax returns by the United States Internal Revenue Service and other tax authorities around the world.
Local country, state, provincial or municipal taxation may also be subject to review and potential override by regional, federal, national or similar forms of government. In addition, IBM is subject to the continuous examination of its income tax returns by the United States Internal Revenue Service (IRS) and other tax authorities around the world.
The Company May Not Meet Its Growth and Productivity Objectives: On an ongoing basis, IBM seeks to drive greater agility, productivity, flexibility and cost savings by continuously transforming with the use of automation, artificial intelligence, agile processes and changes to the ways of working, while also enabling the scaling of resources, offerings and investments through the company’s globally integrated model across both emerging and more established markets.
The Company May Not Meet Its Growth and Productivity Objectives: On an ongoing basis, IBM seeks to drive greater agility, productivity, flexibility and cost savings by continuously transforming with the use of automation, AI, agile processes and changes to the ways of working, while also enabling the scaling of resources, offerings and investments through the company’s globally integrated model across both emerging and more established markets.
The risks associated with such legal proceedings are described in more detail in note R, “Commitments & Contingencies,” in IBM’s 2022 Annual Report to Stockholders. The company believes it has adopted appropriate risk management and compliance programs.
The risks associated with such legal proceedings are described in more detail in note R, “Commitments & Contingencies,” in IBM’s 2023 Annual Report to Stockholders. The company believes it has adopted appropriate risk management and compliance programs.
The company’s earnings and cash flows, as well as its access to funding, could be negatively impacted by changes in market liquidity conditions. IBM’s 2022 Annual Report to Stockholders includes information about the company’s liquidity position.
The company’s earnings and cash flows, as well as its access to funding, could be negatively impacted by changes in market liquidity conditions. IBM’s 2023 Annual Report to Stockholders includes information about the company’s liquidity position.
Legal and compliance risks, however, will continue to exist and additional legal proceedings and other contingencies, the outcome of which cannot be predicted with certainty, may arise from time to time. ​ ​ ​ ​ 8 Table of Contents Risks Related to Financing and Capital Markets Activities ​ The Company’s Results of Operations and Financial Condition Could Be Negatively Impacted by Its U.S. and non-U.S.
Legal and compliance risks, however, will continue to exist and additional legal proceedings and other contingencies, the outcome of which cannot be predicted with certainty, may arise from time to time. Risks Related to Financing and Capital Markets Activities The Company’s Results of Operations and Financial Condition Could Be Negatively Impacted by Its U.S. and non-U.S.
The enactment and expansion of cybersecurity, data protection and privacy laws, regulations and standards around the globe will continue to result in increased compliance costs, including due to an increased focus on international data transfer mechanisms and data location; increased cybersecurity requirements and reporting obligations; the lack of harmonization of such laws and regulations; the increase in associated litigation and enforcement activity by governments and private parties; the potential for damages, fines and penalties and debarment; and the potential regulation of new and emerging technologies such as artificial intelligence.
The enactment and expansion of cybersecurity, AI, data protection and privacy laws, regulations and standards around the globe will continue to result in increased compliance costs, including due to an increased focus on international data transfer mechanisms and data location; increased cybersecurity requirements and reporting obligations; the lack of harmonization of such laws and regulations; the increase in associated litigation and enforcement activity by governments and private parties; the potential for damages, fines and penalties and debarment; and the potential regulation of new and emerging technologies.
As a global enterprise, the regulatory environment with regard to cybersecurity, privacy and data protection issues is increasingly complex and will continue to impact the company’s business, including through increased risk, increased costs, and expanded or otherwise altered compliance obligations, including with respect to the increased regulatory activity around the security of critical infrastructure, IoT devices, customer industries (e.g., financial services) and 7 Table of Contents various customer and government supply chain security programs.
As a global enterprise, the regulatory environment with regard to cybersecurity, privacy, AI and data protection issues is increasingly complex and will continue to impact the company’s business, including through increased risk, increased costs, and expanded or otherwise altered compliance obligations, including with respect to the increased regulatory activity around the security of critical infrastructure, IoT devices, customer industries (e.g., financial services) and various customer and government supply chain security programs.
The company’s 4 Table of Contents financial results may also be impacted by the structure of products and services contracts and the nature of its customers’ businesses; for example, certain of the company’s services contracts with commercial customers in regulated industries are subject to periodic review by regulators with respect to controls and processes.
The company’s financial results may also be impacted by the structure of products and services contracts and the nature of its customers’ businesses; for example, certain of the company’s services contracts with commercial customers in regulated industries are subject to periodic review by regulators with respect to controls and processes.
Failure of Innovation Initiatives Could Impact the Long-Term Success of the Company: IBM has moved into areas, including those that incorporate or utilize hybrid cloud, artificial intelligence, quantum and other disruptive technologies, in which it can differentiate itself through responsible innovation, by leveraging its investments in R&D and attracting a successful developer ecosystem.
Failure of Innovation Initiatives Could Impact the Long-Term Success of the Company: IBM has moved into areas, including those that incorporate or utilize hybrid cloud, AI (including generative AI), quantum and other disruptive technologies, in which it can differentiate itself through responsible innovation, by leveraging its investments in R&D and attracting a successful developer ecosystem.
If the company’s brand image is tarnished by negative perceptions, its ability to attract and retain customers, talent and ecosystem partners could be impacted. Risks from Investing in Growth Opportunities Could Impact the Company’s Business: The company continues to invest significantly in key strategic areas to drive revenue growth and market share gains.
If the company’s brand image is tarnished by negative perceptions, its ability to attract and retain customers, talent and ecosystem partners could be impacted. 3 Table of Contents Risks from Investing in Growth Opportunities Could Impact the Company’s Business: The company continues to invest significantly in key strategic areas to drive revenue growth and market share gains.
We do not expect climate change or compliance with environmental laws and regulations focused on climate change to have a disproportionate effect on the company or its financial position, results of operations and competitive position.
We do not 7 Table of Contents expect climate change or compliance with environmental laws and regulations focused on climate change to have a disproportionate effect on the company or its financial position, results of operations and competitive position.
Further, the company may be impacted directly or indirectly by the development and enforcement of laws and regulations in the U.S. and globally that are specifically targeted at the technology industry.
Further, the company may 4 Table of Contents be impacted directly or indirectly by the development and enforcement of laws and regulations in the U.S. and globally that are specifically targeted at the technology industry.
If the company becomes aware of information related to the creditworthiness of a major customer, or if future actual default rates on receivables in general differ from those currently anticipated, the company may have to adjust its allowance for credit losses, which could affect the company’s consolidated net income in the period the adjustments are made. ​ Risks Related to the Spin-Off of Kyndryl Holdings, Inc. ​ If the Kyndryl Holdings, Inc.
If the company becomes aware of information related to the creditworthiness of a major customer, or if future actual default rates on receivables in general differ from those currently anticipated, the company may have to adjust its allowance for credit losses, which could affect the company’s consolidated net income in the period the adjustments are made.
The company’s most critical accounting estimates are described in the Management Discussion in IBM’s 2022 Annual Report to Stockholders, under “Critical Accounting Estimates.” In addition, as discussed in note R, “Commitments & Contingencies,” in IBM’s 2022 Annual Report to Stockholders, the company makes certain estimates including 5 Table of Contents decisions related to legal proceedings and reserves.
The company’s most critical accounting estimates are described in the Management Discussion in IBM’s 2023 Annual Report to Stockholders, under “Critical Accounting Estimates.” In addition, as discussed in note R, “Commitments & Contingencies,” in IBM’s 2023 Annual Report to Stockholders, the company makes certain estimates including decisions related to legal proceedings and reserves.
Successful cybersecurity attacks or other security incidents could result in, for example, one or more of the following: unauthorized access to, disclosure, modification, misuse, loss, or destruction of company, customer, or other third party data or systems; theft or import or export of sensitive, regulated, or confidential data including personal information and intellectual property, including key innovations in artificial intelligence, quantum, or other disruptive technologies; the loss of access to critical data or systems through ransomware, crypto mining, destructive attacks or other means; and business delays, service or system disruptions or denials of service.
Cybersecurity attacks or other security incidents, including industry-wide incidents such as MOVEit, have or could result in, for example, one or more of the following: unauthorized access to, disclosure, modification, misuse, loss, or destruction of company, customer, or other third-party data or systems; theft or import or export of sensitive, regulated, or confidential data including personal information and intellectual property, including key innovations in AI, quantum, or other disruptive technologies; the loss of access to critical data or systems through ransomware, crypto mining, destructive attacks or other means; and business delays, service or system disruptions or denials of service.
Cyber threats are continually evolving, making it difficult to defend against such threats and vulnerabilities that can persist undetected over extended periods of time.
Cyber threats are continually evolving, including with the increased use of AI, making it difficult to defend against such threats and vulnerabilities that can persist undetected over extended periods of time.
IBM’s 2022 Annual Report to Stockholders includes information about potential impacts from pension funding and the use of certain assumptions regarding pension matters. ​ The Company Is Exposed to Currency and Financing Risks That Could Impact Its Revenue and Business: The company derives a significant percentage of its revenues and costs from its affiliates operating in local currency environments, and those results are affected by changes in the relative values of non-U.S. currencies and the U.S. dollar, as well as sudden shifts in regional or global economic activity.
The Company Is Exposed to Currency and Financing Risks That Could Impact Its Revenue and Business: The company derives a significant percentage of its revenues and costs from its affiliates operating in local currency environments, and those results are affected by changes in the relative values of non-U.S. currencies and the U.S. dollar, as well as sudden shifts in regional or global economic activity.
In addition, there can be no assurance that the company’s efforts to manage its currency and financing risks will be successful. ​ The Company’s Financial Performance Could Be Impacted by Changes in Market Liquidity Conditions and by Customer Credit Risk on Receivables: The company’s financial performance is exposed to a wide variety of industry sector dynamics worldwide, including sudden shifts in regional or global economic activity.
The Company’s Financial Performance Could Be Impacted by Changes in Market Liquidity Conditions and by Customer Credit Risk on Receivables: The company’s financial performance is exposed to a wide variety of industry sector dynamics worldwide, including sudden shifts in regional or global economic activity.
The company’s ability to pay interest and repay the principal for its debt securities is dependent upon its ability to manage its business operations, as well as the other risks described under this Item 1A. entitled “Risk Factors.” There can be no assurance that the company will be able to manage any of these risks successfully. ​ The company also issues its common stock from time to time in connection with various compensation plans, contributions to its pension plan and certain acquisitions.
The company’s ability to pay interest and repay the principal for its debt securities is dependent upon its ability to manage its business operations, as well as the other risks described under this Item 1A. entitled “Risk Factors.” There can be no assurance that the company will be able to manage any of these risks successfully.
There can be no assurance that the outcomes from these examinations will not have an adverse effect on the company’s provision for income taxes and cash tax liability. ​ The Company Is Subject to Legal Proceedings and Investigatory Risks: As a company with a substantial employee population and with clients in more than 175 countries, IBM is or may become involved as a party and/or may be subject to a variety of claims, demands, suits, investigations, tax matters and other proceedings that arise from time to time in the ordinary course of its business.
The Company Is Subject to Legal Proceedings and Investigatory Risks: As a company with a substantial employee population and with clients in more than 175 countries, IBM is or may become involved as a party and/or may be subject to a variety of claims, demands, suits, investigations, tax matters and other proceedings that arise from time to time in the ordinary course of its business.
In addition, the failure of ecosystem partners to comply with all applicable laws and regulations may prevent the company from working with them and could subject the company to losses and affect its ability to bring products to market. 6 Table of Contents Risks Related to Cybersecurity and Data Privacy Cybersecurity and Privacy Considerations Could Impact the Company’s Business: There are numerous and evolving risks to cybersecurity and privacy, including risks originating from intentional acts of criminal hackers, hacktivists, nation states and competitors; from intentional and unintentional acts of customers, contractors, business partners, vendors, employees and other third parties; and from errors in processes or technologies, as well as the risks associated with an increase in the number of customers, contractors, business partners, vendors, employees and other third parties working remotely.
Risks Related to Cybersecurity and Data Privacy Cybersecurity and Privacy Considerations Could Impact the Company’s Business: There are numerous and evolving risks to cybersecurity and privacy, including risks originating from intentional acts of criminal hackers, hacktivists, nation states and competitors; from intentional and unintentional acts or omissions of customers, contractors, business partners, vendors, employees and other third parties; and from errors in processes or technologies, as well as the risks associated with an increase in the number of customers, contractors, business partners, vendors, employees and other third parties working remotely.
The Company’s Business Could Be Impacted by Its Relationships with Critical Suppliers: IBM’s business employs a wide variety of components (hardware and software), supplies, services and raw materials from a substantial number of suppliers around the world. Certain of the company’s businesses rely on a single or a limited number of suppliers, including for server processor technology for certain semiconductors.
The Company’s Business Could Be Impacted by Its Relationships with Critical Suppliers: IBM’s business employs a wide variety of components (hardware and software), supplies, services and raw materials from a substantial number of 5 Table of Contents suppliers around the world.
The company’s client base includes many enterprises worldwide, from small and medium businesses to the world’s largest organizations and governments, with a significant portion of the company’s revenue coming from global clients across many sectors. Most of the company’s sales are on an open credit basis, and the company performs ongoing credit evaluations of its clients’ financial conditions.
The company’s client base includes many enterprises worldwide, from small and medium businesses to the world’s largest organizations and governments, with a significant portion of the company’s revenue coming from global clients across many sectors.
Changes in the business condition (financial or otherwise) of these suppliers could subject the company to losses and affect its ability to bring products to market.
Certain of the company’s businesses rely on a single or a limited number of suppliers, including for server processor technology for certain semiconductors. Changes in the business condition (financial or otherwise) of these suppliers could subject the company to losses and affect its ability to bring products to market.
The company employs a number of strategies to manage these risks, including the use of derivative financial instruments, which involve the risk of non-performance by the counterparty.
The company employs a number of strategies to manage these risks, including the use of derivative financial instruments, which involve the risk of non-performance by the counterparty. In addition, there can be no assurance that the company’s efforts to manage its currency and financing risks will be successful.
The company regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of its provision for income taxes.
The company regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of its provision for income taxes. There can be no assurance that the outcomes from these examinations will not have an adverse effect on the company’s provision for income taxes and cash tax liability.
If the spin-off is determined to be taxable for U.S. federal income tax purposes, the company’s stockholders that are subject to U.S. federal income tax and the company could incur significant U.S. federal income tax liabilities. ​ ​ ​ ​ 9 Table of Contents Risks Related to Ownership of IBM Securities ​ Risk Factors Related to IBM Securities: The company and its subsidiaries issue debt securities in the worldwide capital markets from time to time, with a variety of different maturities and in different currencies.
Risks Related to Ownership of IBM Securities Risk Factors Related to IBM Securities: The company and its subsidiaries issue debt securities in the worldwide capital markets from time to time, with a variety of different maturities and in different currencies.
The company regularly addresses cybersecurity attacks and vulnerabilities with the potential for exploitation, and while the company continues to monitor for, identify, investigate, respond to and remediate such events, there have not been cybersecurity incidents or vulnerabilities that have had a material adverse effect on the company, though there is no assurance that there will not be cybersecurity incidents or vulnerabilities that will have a material adverse effect in the future.
These products, services, systems and networks are also used by customers in heavily regulated industries, including those in the financial services, healthcare, critical infrastructure and government sectors. 6 Table of Contents While the company continues to monitor for, identify, investigate, respond to and remediate a wide range of cybersecurity events, there have not been cybersecurity incidents or vulnerabilities that have had a material adverse effect on the company, though there is no assurance that there will not be cybersecurity incidents or vulnerabilities that will have a material adverse effect in the future.
Premium increases could be significant due to the level of insolvencies of unrelated companies in the country at issue.
Premium increases could be significant due to the level of insolvencies of unrelated companies in the country at issue. IBM’s 2023 Annual Report to Stockholders includes information about potential impacts from pension funding and the use of certain assumptions regarding pension matters.
Removed
These products, services, systems and networks are also used by customers in heavily regulated industries, including those in the financial services, healthcare, critical infrastructure and government sectors.
Added
Damage to IBM’s Reputation Could Impact the Company’s Business: IBM has one of the strongest brand names in the world, and its brand and overall reputation could be negatively impacted by many factors, including if the company does not continue to be recognized for its industry leading technology and solutions and as a hybrid cloud and AI leader.
Added
In addition, the failure of ecosystem partners to comply with all applicable laws and regulations may prevent the company from working with them and could subject the company to losses and affect its ability to bring products to market.
Added
The company regularly addresses cybersecurity attacks and vulnerabilities.
Added
Most of 8 Table of Contents the company’s sales are on an open credit basis, and the company performs ongoing credit evaluations of its clients’ financial conditions.
Added
Risks Related to the Spin-Off of Kyndryl Holdings, Inc. If the Kyndryl Holdings, Inc.
Added
If the spin-off is determined to be taxable for U.S. federal income tax purposes, the company’s stockholders that are subject to U.S. federal income tax and the company could incur significant U.S. federal income tax liabilities.
Added
The company also issues its common stock from time to time in connection with various compensation plans, contributions to its pension plan and certain acquisitions.

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−0 removed1 unchanged
Biggest changeItem 2. Properties: IBM’s corporate headquarters are located at an owned site in Armonk, New York. As of December 31, 2022, in aggregate, we owned or leased facilities for current use consisting of approximately 47 million square feet worldwide.
Biggest changeItem 2. Properties: IBM ’s corporate headquarters are located at an owned site in Armonk, New York. As of December 31, 2023, in aggregate, we owned or leased facilities for current use consisting of approximat ely 44 million square feet worldwide.
This space is primarily used for sales and distribution, manufacturing and development, data processing services including the company’s cloud centers, research and other administrative and general support purposes. Our facilities are utilized for current operations of all business segments. Continuous maintenance and upgrading of facilities are essential to maintain technological leadership, improve productivity and meet customer demand.
This space is primarily used for sales and distribution, manufacturing and development, data processing services including the company’s cloud centers, research and other administrative and general support purposes. Our facilities are utilized for current operations of all business segments. Continuous optimization, maintenance and upgrading of facilities are essential to maintain our technological leadership, improve productivity and meet customer demand.
At December 31, 2022, IBM’s facilities in the U.S. had aggregate floor space of approximately 18 million square feet, of which approximately 9 million was owned and 9 million was leased. Outside the U.S., facilities totaled approximately 29 million square feet, of which 6 million was owned and 23 million was leased.
At December 31, 2023, IBM’s facilities in the U.S. had aggregate floor space of approximately 18 million square feet, of which approximately 9 million was owned and 9 million was leased. Outside the U.S., facilities totaled approximately 26 million square feet, of which 4 million was owned and 22 million was leased.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 3. Legal Proceedings: Refer to note R, “Commitments & Contingencies,” on pages 96 to 98 of IBM’s 2022 Annual Report to Stockholders, which is incorporated herein by reference. ​ Item 4. Mine Safety Disclosures: Not applicable. ​ 10 Table of Contents PART II
Biggest changeItem 3. Legal Proceedings: Refer to note R, “Commitments & Contingencies,” on pages 95 to 97 of IBM’s 2023 Annual Report to Stockholders, which is incorporated herein by reference. Item 4. Mine Safety Disclosures: Not applicable. 11 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+0 added−1 removed1 unchanged
Biggest changeThe following table provides information relating to the company’s repurchase of common stock for the fourth quarter of 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total 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* October 1, 2022— October 31, 2022 ​ — ​ $ — ​ — ​ $ 2,007,611,768 November 1, 2022— November 30, 2022 ​ — ​ $ — ​ — ​ $ 2,007,611,768 December 1, 2022— December 31, 2022 ​ — ​ $ — ​ — ​ $ 2,007,611,768 Total ​ — ​ $ — ​ — ​ ​ ​ * On October 30, 2018, the Board of Directors authorized $4.0 billion in funds for use in the company’s common stock repurchase program.
Biggest changeTotal 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) October 1, 2023—October 31, 2023 — $ — — $ 2,007,611,768 November 1, 2023—November 30, 2023 — $ — — $ 2,007,611,768 December 1, 2023—December 31, 2023 — $ — — $ 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.
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities: Refer to page 122 of IBM’s 2022 Annual Report to Stockholders, which is incorporated herein by reference solely as it relates to this item.
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities: Refer to page 123 of IBM’s 2023 Annual Report to Stockholders, which is incorporated herein by reference solely as it relates to this item.
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 acquisition in 2019.
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. Item 6. [Reserved]
IBM common stock is listed on the New York Stock Exchange and the NYSE Chicago under the symbol “IBM.” There were 380,977 common stockholders of record at February 10, 2023.
IBM common stock is listed on the New York Stock Exchange and the NYSE Chicago under the symbol “IBM.” There were 378,481 common stockholders of record at February 9, 2024. The following table provides information relating to the company’s repurchase of common stock for the fourth quarter of 2023.
Removed
At December 31, 2022 there was approximately $2.0 billion in authorized funds remaining for purchases under this program. Item 6. [Reserved] ​

Other IBM 10-K year-over-year comparisons