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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED SEPTEMBER 30, 2023
1-2360
(Commission file number)
INTERNATIONAL BUSINESS MACHINES CORPORATION
(Exact name of registrant as specified in its charter)
New York
(State of incorporation)
13-0871985
(IRS employer identification number)
One New Orchard Road
Armonk, New York
(Address of principal executive offices)
10504
(Zip Code)
914-499-1900
(Registrant’s telephone number)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange
on which registered
Capital stock, par value $.20 per shareIBMNew York Stock Exchange
NYSE Chicago
1.125% Notes due 2024IBM 24ANew York Stock Exchange
2.875% Notes due 2025IBM 25ANew York Stock Exchange
0.950% Notes due 2025IBM 25BNew York Stock Exchange
0.875% Notes due 2025IBM 25CNew York Stock Exchange
0.300% Notes due 2026IBM 26BNew York Stock Exchange
1.250% Notes due 2027IBM 27BNew York Stock Exchange
3.375% Notes due 2027IBM 27FNew York Stock Exchange
0.300% Notes due 2028IBM 28BNew York Stock Exchange
1.750% Notes due 2028IBM 28ANew York Stock Exchange
1.500% Notes due 2029IBM 29New York Stock Exchange
0.875% Notes due 2030IBM 30ANew York Stock Exchange
1.750% Notes due 2031IBM 31New York Stock Exchange
3.625% Notes due 2031IBM 31BNew York Stock Exchange
0.650% Notes due 2032IBM 32ANew York Stock Exchange
1.250% Notes due 2034IBM 34New York Stock Exchange
3.750% Notes due 2035IBM 35New York Stock Exchange
4.875% Notes due 2038IBM 38New York Stock Exchange
1.200% Notes due 2040IBM 40New York Stock Exchange
4.000% Notes due 2043IBM 43New York Stock Exchange
7.00% Debentures due 2025IBM 25New York Stock Exchange
6.22% Debentures due 2027IBM 27New York Stock Exchange
6.50% Debentures due 2028IBM 28New York Stock Exchange
5.875% Debentures due 2032IBM 32DNew York Stock Exchange
7.00% Debentures due 2045IBM 45New York Stock Exchange
7.125% Debentures due 2096IBM 96New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section l3 or l5(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☒
The registrant had 913,118,581 shares of common stock outstanding at September 30, 2023.


Table of Contents
Index

Page
2

Table of Contents
Part I - Financial Information
Item 1. Consolidated Financial Statements:
INTERNATIONAL BUSINESS MACHINES CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED INCOME STATEMENT
(UNAUDITED)
Three Months Ended September 30, Nine Months Ended September 30,
(Dollars in millions except per share amounts) 2023 2022 2023 2022
Revenue:    
Services$7,541 $7,365 $22,618 $22,708 
Sales7,025 6,565 21,296 20,652 
Financing186 176 566 479 
Total revenue14,752 14,107 44,479 43,840 
Cost:    
Services5,217 5,168 15,821 15,915 
Sales1,419 1,389 4,329 4,555 
Financing94 120 297 314 
Total cost6,729 6,677 20,446 20,784 
Gross profit8,023 7,430 24,033 23,055 
Expense and other (income):    
Selling, general and administrative4,458 4,391 14,212 13,843 
Research, development and engineering1,685 1,611 5,027 4,963 
Intellectual property and custom development income(190)(121)(618)(418)
Other (income) and expense(215)5,755 (721)5,921 
Interest expense412 295 1,202 903 
Total expense and other (income)6,150 11,931 19,102 25,212 
Income/(loss) from continuing operations before income taxes1,873 (4,501)4,931 (2,156)
Provision for/(benefit from) income taxes159 (1,287)702 (1,070)
Income/(loss) from continuing operations
$1,714 $(3,214)$4,229 $(1,087)
Income/(loss) from discontinued operations, net of tax(10)18 (15)16 
Net income/(loss)$1,704 $(3,196)*$4,214 $(1,071)*
Earnings/(loss) per share of common stock:    
Assuming dilution:    
Continuing operations$1.86 $(3.55)$4.59 $(1.21)
Discontinued operations(0.01)0.02 (0.02)0.02 
Total$1.84 $(3.54)$4.58 $(1.19)
Basic:    
Continuing operations$1.88 $(3.55)$4.65 $(1.21)
Discontinued operations(0.01)0.02 (0.02)0.02 
Total$1.87 $(3.54)$4.63 $(1.19)
Weighted-average number of common shares outstanding: (millions)    
Assuming dilution923.7 904.1 920.3 901.6 
Basic912.8 904.1 910.1 901.6 
* Includes the impact of a one-time, non-cash pension settlement charge. Refer to note 18, "Retirement-Related Benefits," for additional information.
(Amounts may not add due to rounding.)
(The accompanying notes are an integral part of the financial statements.)
3

Table of Contents
INTERNATIONAL BUSINESS MACHINES CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(UNAUDITED)
Three Months Ended September 30, Nine Months Ended September 30,
(Dollars in millions) 2023 2022 2023 2022
Net income/(loss)$1,704 $(3,196)$4,214 $(1,071)
Other comprehensive income/(loss), before tax:    
Foreign currency translation adjustments151 143 180 799 
Net changes related to available-for-sale securities:    
Unrealized gains/(losses) arising during the period0 0 (1)(1)
Reclassification of (gains)/losses to net income    
Total net changes related to available-for-sale securities0 0 (1)(1)
Unrealized gains/(losses) on cash flow hedges:    
Unrealized gains/(losses) arising during the period131 189 279 449 
Reclassification of (gains)/losses to net income202 (12)51 4 
Total unrealized gains/(losses) on cash flow hedges333 178 330 453 
Retirement-related benefit plans:    
Prior service costs/(credits) 412  408 
Net (losses)/gains arising during the period102 53 104 63 
Curtailments and settlements2 5,913 7 5,931 
Amortization of prior service (credits)/costs(2)3 (6)16 
Amortization of net (gains)/losses128 388 389 1,305 
Total retirement-related benefit plans230 6,768 494 7,722 
Other comprehensive income/(loss), before tax714 7,089 1,003 8,973 
Income tax (expense)/benefit related to items of other comprehensive income(313)(2,058)(361)(2,877)
Other comprehensive income/(loss), net of tax402 5,030 642 6,096 
Total comprehensive income$2,105 $1,834 $4,857 $5,025 
(Amounts may not add due to rounding.)
(The accompanying notes are an integral part of the financial statements.)
4

Table of Contents
INTERNATIONAL BUSINESS MACHINES CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
ASSETS
(Dollars in millions)At September 30, 2023At December 31, 2022
Assets:  
Current assets:  
Cash and cash equivalents$7,257 $7,886 
Restricted cash19 103 
Marketable securities3,721 852 
Notes and accounts receivable — trade (net of allowances of $198 in 2023 and $233 in 2022)
5,330 6,541 
Short-term financing receivables:
Held for investment (net of allowances of $133 in 2023 and $145 in 2022)
5,032 6,851 
Held for sale593 939 
Other accounts receivable (net of allowances of $106 in 2023 and $89 in 2022)
842 817 
Inventory, at lower of average cost or net realizable value:
Finished goods159 158 
Work in process and raw materials1,239 1,394 
Total inventory1,399 1,552 
Deferred costs931 967 
Prepaid expenses and other current assets2,582 2,611 
Total current assets27,705 29,118 
Property, plant and equipment18,217 18,695 
Less: Accumulated depreciation12,848 13,361 
Property, plant and equipment — net5,369 5,334 
Operating right-of-use assets — net3,112 2,878 
Long-term financing receivables (net of allowances of $26 in 2023 and $28 in 2022)
4,789 5,806 
Prepaid pension assets8,901 8,236 
Deferred costs822 866 
Deferred taxes6,168 6,256 
Goodwill59,596 55,949 
Intangible assets — net11,278 11,184 
Investments and sundry assets1,582 1,617 
Total assets$129,321 $127,243 
(Amounts may not add due to rounding.)
(The accompanying notes are an integral part of the financial statements.)
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INTERNATIONAL BUSINESS MACHINES CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET – (CONTINUED)
(UNAUDITED)
LIABILITIES AND EQUITY
(Dollars in millions except per share amounts)At September 30, 2023At December 31, 2022
Liabilities:
Current liabilities:  
Taxes$1,559 $2,196 
Short-term debt6,414 4,760 
Accounts payable3,342 4,051 
Compensation and benefits3,257 3,481 
Deferred income11,917 12,032 
Operating lease liabilities807 874 
Other accrued expenses and liabilities3,309 4,111 
Total current liabilities30,606 31,505 
Long-term debt48,828 46,189 
Retirement and nonpension postretirement benefit obligations9,090 9,596 
Deferred income3,085 3,499 
Operating lease liabilities2,476 2,190 
Other liabilities12,081 12,243 
Total liabilities106,165 105,222 
Equity:  
IBM stockholders’ equity:  
Common stock, par value $0.20 per share, and additional paid-in capital
59,313 58,343 
Shares authorized: 4,687,500,000
  
Shares issued: 2023 - 2,265,198,427
  
2022 - 2,257,116,920
  
Retained earnings149,506 149,825 
Treasury stock - at cost(169,640)(169,484)
Shares: 2023 - 1,352,079,846
  
2022 - 1,351,024,943
  
Accumulated other comprehensive income/(loss)(16,098)(16,740)
Total IBM stockholders’ equity23,081 21,944 
Noncontrolling interests75 77 
Total equity23,156 22,021 
Total liabilities and equity$129,321 $127,243 
(Amounts may not add due to rounding.)
(The accompanying notes are an integral part of the financial statements.)
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INTERNATIONAL BUSINESS MACHINES CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
Nine Months Ended September 30,
(Dollars in millions) 2023 2022*
Cash flows from operating activities:  
Net income/(loss)$4,214 $(1,071)
Adjustments to reconcile net income/(loss) to cash provided by operating activities:  
Pension settlement charge 5,894 
Depreciation1,568 1,837 
Amortization of intangibles1,676 1,828 
Stock-based compensation843 739 
Net (gain)/loss on asset sales and other(89)(60)
Changes in operating assets and liabilities, net of acquisitions/divestitures1,257 (2,695)**
Net cash provided by operating activities9,468 6,470 
Cash flows from investing activities:  
Payments for property, plant and equipment(945)(937)
Proceeds from disposition of property, plant and equipment137 98 
Investment in software(417)(479)
Acquisition of businesses, net of cash acquired(4,945)(1,020)
Divestitures of businesses, net of cash transferred(4)1,271 
Purchases of marketable securities and other investments(10,374)(4,474)
Proceeds from disposition of marketable securities and other investments6,642 2,655 
Net cash provided by/(used in) investing activities(9,906)(2,883)
Cash flows from financing activities:  
Proceeds from new debt9,586 7,797 
Payments to settle debt(4,973)(5,446)
Short-term borrowings/(repayments) less than 90 days — net6 221 
Common stock repurchases for tax withholdings(338)(329)
Financing — other86 106 
Cash dividends paid(4,522)(4,454)
Net cash provided by/(used in) financing activities(154)(2,106)
Effect of exchange rate changes on cash, cash equivalents and restricted cash(120)(463)
Net change in cash, cash equivalents and restricted cash(713)1,018 
Cash, cash equivalents and restricted cash at January 17,988 6,957 
Cash, cash equivalents and restricted cash at September 30$7,275 $7,975 
* Includes immaterial cash flows from discontinued operations.
** Refer to note 1, "Basis of Presentation," for additional information.
(Amounts may not add due to rounding.)
(The accompanying notes are an integral part of the financial statements.)
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INTERNATIONAL BUSINESS MACHINES CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF EQUITY
(UNAUDITED)
(Dollars in millions except per share amounts)Common
Stock and
Additional
Paid-in
Capital
 Retained
Earnings
 Treasury
Stock
 Accumulated
Other
Comprehensive
Income/(Loss)
 Total IBM
Stockholders'
Equity
 Non-
Controlling
Interests
 Total
Equity
Equity - July 1, 2023$58,963 $149,318 $(169,581)$(16,499)$22,201 $70 $22,271 
Net income plus other comprehensive income/(loss):        
Net income 1,704   1,704  1,704 
Other comprehensive income/(loss)   402 402  402 
Total comprehensive income
    $2,105  $2,105 
Cash dividends paid — common stock ($1.66 per share)
 (1,515)  (1,515) (1,515)
Common stock issued under employee plans (2,501,236 shares)
350    350  350 
Purchases (688,254 shares) and sales (299,359 shares) of treasury stock under employee plans — net
 (1)(60) (60) (60)
Changes in noncontrolling interests     5 5 
Equity – September 30, 2023$59,313 $149,506 $(169,640)$(16,098)$23,081 $75 $23,156 
(Dollars in millions except per share amounts)Common
Stock and
Additional
Paid-in
Capital
Retained
Earnings
Treasury
Stock
Accumulated
Other
Comprehensive
Income/(Loss)
Total IBM
Stockholders'
Equity
Non-
Controlling
Interests
Total
Equity
Equity - July 1, 2022$57,802 $153,298 $(169,522)$(22,169)$19,409 $67 $19,476 
Net income/(loss) plus other comprehensive income/(loss):
       
Net income/(loss) (3,196)  (3,196) (3,196)
Other comprehensive income/(loss)   5,030 5,030  5,030 
Total comprehensive income
    $1,834  $1,834 
Cash dividends paid — common stock ($1.65 per share)
 (1,491)  (1,491) (1,491)
Common stock issued under employee plans (871,676 shares)
315    315 315
Purchases (103,736 shares) and sales (178,069 shares) of treasury stock under employee plans — net
 0 8  8  8 
Changes in noncontrolling interests     4 4 
Equity - September 30, 2022$58,117 $148,611 $(169,514)$(17,138)$20,076 $71 $20,147 
(Amounts may not add due to rounding.)
(The accompanying notes are an integral part of the financial statements.)
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INTERNATIONAL BUSINESS MACHINES CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF EQUITY – (CONTINUED)
(UNAUDITED)
(Dollars in millions except per share amounts)Common
Stock and
Additional
Paid-in
Capital
Retained
Earnings
Treasury
Stock
Accumulated
Other
Comprehensive
Income/(Loss)
Total IBM
Stockholders'
Equity
Non-
Controlling
Interests
Total
Equity
Equity - January 1, 2023$58,343 $149,825 $(169,484)$(16,740)$21,944 $77 $22,021 
Net income plus other comprehensive income/(loss):        
Net income 4,214   4,214  4,214 
Other comprehensive income/(loss)   642 642  642 
Total comprehensive income
    $4,857  $4,857 
Cash dividends paid — common stock ($4.97 per share)
 (4,522)  (4,522) (4,522)
Common stock issued under employee plans (8,081,507 shares)
970    970  970 
Purchases (2,498,567 shares) and sales (1,443,664 shares) of treasury stock under employee plans — net
 (11)(156) (167) (167)
Changes in noncontrolling interests     (2)(2)
Equity - September 30, 2023$59,313 $149,506 $(169,640)$(16,098)$23,081 $75 $23,156 
(Dollars in millions except per share amounts)Common
Stock and
Additional
Paid-in
Capital
Retained
Earnings
Treasury
Stock
Accumulated
Other
Comprehensive
Income/(Loss)
Total IBM
Stockholders'
Equity
Non-
Controlling
Interests
Total
Equity
Equity - January 1, 2022$57,319 $154,209 $(169,392)$(23,234)$18,901 $95 $18,996 
Net income/(loss) plus other comprehensive income/(loss):
       
Net income/(loss) (1,071)  (1,071) (1,071)
Other comprehensive income/(loss)   6,096 6,096  6,096 
Total comprehensive income
    $5,025  $5,025 
Cash dividends paid — common stock ($4.94 per share)
 (4,454)  (4,454) (4,454)
Common stock issued under employee plans (6,832,400 shares)
736    736  736 
Purchases (2,423,220 shares) and sales (1,648,583 shares) of treasury stock under employee plans — net
 (10)(122) (133) (133)
Other equity63 (63)0 0 
Changes in noncontrolling interests     (23)(23)
Equity - September 30, 2022$58,117 $148,611 $(169,514)$(17,138)$20,076 $71 $20,147 
(Amounts may not add due to rounding.)
(The accompanying notes are an integral part of the financial statements.)
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Notes to Consolidated Financial Statements

1. Basis of Presentation:
The accompanying Consolidated Financial Statements and footnotes of the International Business Machines Corporation (IBM or the company) have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The financial statements and footnotes are unaudited. In the opinion of the company’s management, these statements include all adjustments, which are only of a normal recurring nature, necessary to present a fair statement of the company’s results of operations, financial position and cash flows.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amount of assets, liabilities, revenue, costs, expenses and other comprehensive income/(loss) that are reported in the Consolidated Financial Statements and accompanying disclosures. These estimates are based on management’s best knowledge of current events, historical experience, actions that the company may undertake in the future and on various other assumptions that are believed to be reasonable under the circumstances. As a result, actual results may be different from these estimates.
In September 2022, the IBM Qualified Personal Pension Plan (Qualified PPP) purchased two separate nonparticipating single premium group annuity contracts from The Prudential Insurance Company of America and Metropolitan Life Insurance Company (collectively, the Insurers) and irrevocably transferred to the Insurers approximately $16 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. The group annuity contracts were purchased using assets of the Qualified PPP and no additional funding contribution was required from the company. As a result of this transaction the company recognized a one-time, non-cash, pre-tax pension settlement charge of $5.9 billion ($4.4 billion net of tax) in the third quarter of 2022, primarily related to the accelerated recognition of accumulated actuarial losses of the Qualified PPP. The $1.5 billion tax effect associated with the settlement charge is reflected as an adjustment to reconcile net income/(loss) to cash from operating activities within changes in operating assets and liabilities, net of acquisitions/divestitures in the Consolidated Statement of Cash Flows for the nine months ended September 30, 2022. Refer to note 18, “Retirement-Related Benefits,” for additional information.
In the fourth quarter of 2022, the company completed its annual assessment of the useful lives of its property, plant and equipment. Due to advances in technology, the company determined it should increase the estimated useful lives of its server and network equipment from five to six years for new assets and from three to four years for used assets. This change in accounting estimate was effective beginning January 1, 2023. Based on the carrying amount of server and network equipment included in property, plant and equipment-net in the company's Consolidated Balance Sheet as of December 31, 2022, the effect of this change in estimate was an increase in income from continuing operations before income taxes of $44 million, or $0.04 per basic and diluted share for the three months ended September 30, 2023, and $175 million, or $0.16 and $0.15 per basic and diluted share, respectively, for the nine months ended September 30, 2023.
For the three and nine months ended September 30, 2023, the company reported a provision for income taxes of $159 million and $702 million, respectively, and its effective tax rate was 8.5 percent and 14.2 percent, respectively. The rates are driven by many factors including the impacts of changes to the U.S. Foreign Tax Credit regulations, geographical mix of income, incentives and changes in unrecognized tax benefits. For the three and nine months ended September 30, 2022, the company reported a benefit from income taxes of $1,287 million and $1,070 million, respectively. The tax benefits were primarily due to the transfer of a portion of the Qualified PPP's defined benefit pension obligations and related plan assets, as described above.
Noncontrolling interest amounts of $4 million, net of tax, for both the three months ended September 30, 2023 and 2022, respectively, and $13 million and $14 million, net of tax, for the nine months ended September 30, 2023 and 2022, respectively, are included as a reduction within other (income) and expense in the Consolidated Income Statement.
The company has supplier finance programs with third-party financial institutions where the company agrees to pay the financial institutions the stated amounts of invoices from participating suppliers on the originally invoiced maturity date, which have an average term of 90 to 120 days, consistent with the company's standard payment terms. The financial institutions offer earlier payment of the invoices at the sole discretion of the supplier for a discounted amount. The company does not provide secured legal assets or other forms of guarantees under the arrangements. The company is not a party to the arrangements between its suppliers and the financial institutions. These obligations are recognized as accounts
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Notes to Consolidated Financial Statements — (continued)
payable in the Consolidated Balance Sheet. The obligations outstanding under these programs at September 30, 2023 and December 31, 2022 were $99 million and $60 million, respectively.
Interim results are not necessarily indicative of financial results for a full year. The information included in this Form 10-Q should be read in conjunction with the company’s 2022 Annual Report.
Within the financial statements and tables presented, certain columns and rows may not add due to the use of rounded numbers for disclosure purposes. Percentages presented are calculated from the underlying whole-dollar amounts. Certain prior-period amounts have been reclassified to conform to the current-period presentation. This is annotated where applicable.
2. Accounting Changes:
Standards Implemented
Disclosures of Supplier Finance Program Obligations
Standard/Description–Issuance date: September 2022. This guidance requires an entity to provide certain interim and annual disclosures about the use of supplier finance programs in connection with the purchase of goods or services.
Effective Date and Adoption Considerations–The guidance was effective January 1, 2023 with certain annual disclosures required beginning in 2024 and early adoption was permitted. The company adopted the guidance as of the effective date.
Effect on Financial Statements or Other Significant Matters–The guidance did not have a material impact in the consolidated financial results. Refer to note 1, "Basis of Presentation," for additional information.
Troubled Debt Restructurings and Vintage Disclosures
Standard/Description–Issuance date: March 2022. This eliminates the accounting guidance for troubled debt restructurings and requires an entity to apply the general loan modification guidance to all loan modifications, including those made to customers experiencing financial difficulty, to determine whether the modification results in a new loan or a continuation of an existing loan. The guidance also requires presenting current-period gross write-offs by year of origination for financing receivables and net investment in leases.
Effective Date and Adoption Considerations–The amendment was effective January 1, 2023 and early adoption was permitted. The company adopted the guidance on a prospective basis as of the effective date.
Effect on Financial Statements or Other Significant Matters–The guidance did not have a material impact in the consolidated financial results. Refer to note 9, "Financing Receivables," for additional information.

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Table of Contents
Notes to Consolidated Financial Statements — (continued)
3. Revenue Recognition:
Disaggregation of Revenue
The following tables provide details of revenue by major products/service offerings and revenue by geography.
Revenue by Major Products/Service Offerings
Three Months Ended September 30,Nine Months Ended September 30,
(Dollars in millions)2023202220232022
Hybrid Platform & Solutions$4,506 $4,172 $13,350 $12,641 
Transaction Processing1,759 1,640 5,444 5,107 
Total Software$6,265 $5,811 $18,794 $17,749 
Business Transformation2,291 2,165 6,869 6,646 
Application Operations1,710 1,593 5,204 4,865 
Technology Consulting961 943 2,865 2,826 
Total Consulting$4,963 $4,700 $14,938 $14,337 
Hybrid Infrastructure1,943 1,931 5,912 6,392 
Infrastructure Support1,329 1,421 4,076 4,413 
Total Infrastructure$3,272 $3,352 $9,988 $10,805 
Financing*186 174 566 474 
Other67 70 192 475 
Total revenue$14,752 $14,107 $44,479 $43,840 
*Contains lease and loan financing arrangements which are not subject to the guidance on revenue from contracts with customers.
Revenue by Geography
 Three Months Ended September 30, Nine Months Ended September 30,
(Dollars in millions)20232022 20232022
Americas$7,686 $7,416 $22,810 $22,614 
Europe/Middle East/Africa4,223 3,959 13,156 12,716 
Asia Pacific2,843 2,732 8,513 8,509 
Total$14,752 $14,107 $44,479 $43,840 
Remaining Performance Obligations
The remaining performance obligation (RPO) disclosure provides the aggregate amount of the transaction price yet to be recognized as of the end of the reporting period and an explanation as to when the company expects to recognize these amounts in revenue. It is intended to be a statement of overall work under contract that has not yet been performed and does not include contracts in which the customer is not committed, such as certain as-a-Service, governmental, term software license and services offerings. The customer is not considered committed when they are able to terminate for convenience without payment of a substantive penalty. The disclosure includes estimates of variable consideration, except when the variable consideration is a sales-based or usage-based royalty promised in exchange for a license of intellectual property. Additionally, as a practical expedient, the company does not include contracts that have an original duration of one year or less. RPO estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts, periodic revalidations, adjustment for revenue that has not materialized and adjustments for currency.
At September 30, 2023, the aggregate amount of the transaction price allocated to RPO related to customer contracts that are unsatisfied or partially unsatisfied was $55 billion. Approximately 71 percent of the amount is expected to be recognized as revenue in the subsequent two years, approximately 26 percent in the subsequent three to five years and the balance thereafter.
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Notes to Consolidated Financial Statements — (continued)
Revenue Recognized for Performance Obligations Satisfied (or Partially Satisfied) in Prior Periods
For the three months ended September 30, 2023 the revenue recognized for performance obligations satisfied (or partially satisfied) in previous periods was immaterial. For the nine months ended September 30, 2023, revenue was reduced by $16 million mainly due to changes in estimates on contracts with cost-to-cost measures of progress.
Reconciliation of Contract Balances
The following table provides information about notes and accounts receivable–trade, contract assets and deferred income balances.
(Dollars in millions)At September 30, 2023At December 31, 2022
Notes and accounts receivable trade (net of allowances of $198 in 2023 and $233 in 2022)
$5,330 $6,541 
Contract assets*$454 $464 
Deferred income (current)$11,917 $12,032 
Deferred income (noncurrent)$3,085 $3,499 
*Included within prepaid expenses and other current assets in the Consolidated Balance Sheet.
The amount of revenue recognized during the three and nine months ended September 30, 2023 that was included within the deferred income balance at June 30, 2023 and December 31, 2022 was $4.3 billion and $9.0 billion, respectively, and was primarily related to services and software.
The following table provides roll forwards of the notes and accounts receivable–trade allowance for expected credit losses for the nine months ended September 30, 2023 and the year ended December 31, 2022.
(Dollars in millions)    
January 1, 2023Additions / (Releases)Write-offs Foreign currency and otherSeptember 30, 2023
$