v3.25.2
Borrowings
 6 Months Ended
Jun. 30, 2025
Debt Disclosure [Abstract]  
Borrowings Borrowings:
Short-Term Debt
The company's total short-term debt at June 30, 2025 and December 31, 2024 was $8,945 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
 BalanceBalance
(Dollars in millions)Maturities6/30/202512/31/2024
U.S. dollar debt (weighted-average interest rate at June 30, 2025): (1)
   
5.1%2025$1,600 $1,601 
3.7%20265,800 5,800 
3.3%20274,119 4,119 
4.8%20282,320 1,313 
3.6%20293,752 3,750 
3.2%20302,355 1,350 
4.8%2031500 500 
4.6%20322,700 1,850 
4.8%2033750 750 
4.9%20341,000 1,000 
5.2%2035900 — 
8.0%203883 83 
4.5%20392,745 2,745 
2.9%2040650 650 
4.0%20421,107 1,107 
5.3%20441,000 1,000 
7.0%204527 27 
4.7%2046650 650 
4.3%20493,000 3,000 
3.0%2050750 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 
$40,576 $35,813 
Euro debt (weighted-average interest rate at June 30, 2025): (1)
2.9% 2025 $1,174 $3,106 
2.3% 2027 2,348 2,071 
0.7% 2028 2,113 1,863 
1.5% 2029 1,174 1,035 
1.7% 2030 2,054 1,035 
2.7% 2031 2,935 2,588 
0.7% 2032 1,878 1,656 
3.2% 2033 1,291 — 
1.3% 2034 1,174 1,035 
3.8% 2035 1,174 1,035 
3.5% 2037 1,056 — 
1.2% 2040 998 880 
4.0% 2043 1,174 1,035 
3.8% 2045 880 — 
$21,422 $17,340 
Other currencies (weighted-average interest rate at June 30, 2025): (1)
  
Pound sterling (4.9%)
2038$1,027 $939 
Japanese yen (0.9%)
2026–2028880 808 
Other (13.8%)
2025–2027158 212 
$64,063 $55,111 
Finance lease obligations (4.8% weighted-average interest rate at June 30, 2025)
2025–20351,180 1,000 
$65,242 $56,112 
Less: net unamortized discount 825 824 
Less: net unamortized debt issuance costs 197 168 
Add: fair value adjustment (2)
 (57)(176)
$64,164 $54,943 
Less: current maturities 8,944 5,059 
Total $55,219 $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 June 30, 2025, were as follows:
(Dollars in millions)Total
Remainder of 2025$2,968 
20266,431 
20276,732 
20285,200 
20295,083 
Thereafter38,828 
Total$65,242 
Interest on Debt
(Dollars in millions)  
For the six months ended June 30:20252024
Cost of financing$173 $167 
Interest expense965 859 
Interest capitalized4 6 
Total interest paid and accrued$1,141 $1,032 
Lines of Credit
On June, 20, 2025, the company amended its $2.5 billion Three-Year Credit Agreement and $7.5 billion Five-Year Credit Agreement (the Credit Agreements) to extend the maturity dates to June 20, 2028 and June 22, 2030, respectively. The Credit Agreements permit the company and its subsidiary borrowers to borrow up to $10 billion on a revolving basis. At June 30, 2025, there were no borrowings by the company, or its subsidiaries, under these credit facilities.