INTERNATIONAL BUSINESS MACHINES CORPIBM
INTERNATIONAL BUSINESS MACHINES CORP Leases Disclosure
LEASES
Accounting for Leases as a Lessee
The following table presents the various components of lease costs.
| ($ in millions) | ||||||||||||||||||||
| For the year ended December 31: | 2025 | 2024 | 2023 | |||||||||||||||||
| Finance lease cost | $ | 331 | $ | 229 | $ | 114 | ||||||||||||||
| Operating lease cost | 1,027 | 1,018 | 1,013 | |||||||||||||||||
| Short-term lease cost | 6 | 9 | 9 | |||||||||||||||||
| Variable lease cost | 300 | 321 | 331 | |||||||||||||||||
| Sublease income | (25) | (39) | (61) | |||||||||||||||||
| Total lease cost | $ | 1,639 | $ | 1,537 | $ | 1,406 | ||||||||||||||
The company did not have any sale and leaseback transactions for the year ended December 31, 2025. The company had net gains on sale and leaseback transactions of $17 million and $145 million for the years ended December 31, 2024 and 2023, respectively.
The following table presents supplemental information relating to the cash flows arising from lease transactions. Cash payments related to variable lease costs and short-term leases are not included in the measurement of operating and finance lease liabilities, and, as such, are excluded from the amounts below.
| ($ in millions) | ||||||||||||||||||||
| For the year ended December 31: | 2025 | 2024 | 2023 | |||||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities | ||||||||||||||||||||
| Operating cash outflows from finance leases | $ | 58 | $ | 43 | $ | 16 | ||||||||||||||
| Financing cash outflows from finance leases | 280 | 189 | 75 | |||||||||||||||||
| Operating cash outflows from operating leases | 1,011 | 961 | 961 | |||||||||||||||||
| ROU assets obtained in exchange for new finance lease liabilities | 444 | 698 | 355 | |||||||||||||||||
| ROU assets obtained in exchange for new operating lease liabilities | 658 | 988 | 1,220 | |||||||||||||||||
The following table presents the weighted-average lease term and discount rate for finance and operating leases.
| At December 31: | 2025 | 2024 | ||||||||||||
| Finance leases | ||||||||||||||
| Weighted-average remaining lease term (in years) | 4.9 | 6.0 | ||||||||||||
| Weighted-average discount rate | 4.85 | % | 5.03 | % | ||||||||||
| Operating leases | ||||||||||||||
| Weighted-average remaining lease term (in years) | 6.4 | 6.4 | ||||||||||||
| Weighted-average discount rate | 5.07 | % | 4.91 | % | ||||||||||
The following table presents a maturity analysis of expected undiscounted cash flows for operating and finance leases on an annual basis for the next five years and thereafter.
| ($ in millions) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | Imputed Interest (1) | Total (2) | |||||||||||||||||||||||||||||||||||||||||||
| Finance leases | $ | 331 | $ | 313 | $ | 225 | $ | 182 | $ | 94 | $ | 152 | $ | (145) | $ | 1,153 | ||||||||||||||||||||||||||||||||||
| Operating leases | 935 | 780 | 562 | 430 | 277 | 974 | (612) | 3,347 | ||||||||||||||||||||||||||||||||||||||||||
(1)Imputed interest represents the difference between undiscounted cash flows and discounted cash flows.
(2)The company entered into lease agreements, primarily related to operating leases, for certain facilities and equipment with payments totaling approximately $314 million that have not yet commenced as of December 31, 2025, and therefore are not included in this table.
The following table presents information on the company’s finance leases recognized in the Consolidated Balance Sheet.
| ($ in millions) | ||||||||||||||
| At December 31: | 2025 | 2024 | ||||||||||||
| ROU assets—Property, plant and equipment | $ | 1,170 | $ | 984 | ||||||||||
| Lease liabilities | ||||||||||||||
| Short-term debt | 279 | 198 | ||||||||||||
| Long-term debt | 874 | 803 | ||||||||||||
Accounting for Leases as a Lessor
The following table presents amounts included in the Consolidated Income Statement related to lessor activity.
| ($ in millions) | ||||||||||||||||||||
| For the year ended December 31: | 2025 | 2024 | 2023 | |||||||||||||||||
| Lease income—sales-type and direct financing leases | ||||||||||||||||||||
| Sales-type lease selling price | $ | 2,226 | $ | 865 | $ | 1,280 | ||||||||||||||
Less: Carrying value of underlying assets (1) | (528) | (176) | (245) | |||||||||||||||||
| Gross profit | 1,697 | 689 | 1,034 | |||||||||||||||||
| Interest income on lease receivables | 243 | 268 | 242 | |||||||||||||||||
| Total sales-type and direct financing lease income | 1,940 | 958 | 1,276 | |||||||||||||||||
| Lease income—operating leases | 43 | 60 | 93 | |||||||||||||||||
| Variable lease income | 74 | 68 | 68 | |||||||||||||||||
| Total lease income | $ | 2,058 | $ | 1,085 | $ | 1,437 | ||||||||||||||
(1)Excludes unguaranteed residual value.
Sales-Type and Direct Financing Leases
At December 31, 2025 and 2024, the unguaranteed residual values of sales-type and direct financing leases were $545 million and $479 million, respectively. Refer to note K, “Financing Receivables,” for additional information on the company’s net investment in leases.
For the years ended December 31, 2025 and 2024, impairment of residual values was not material.
The following table presents a maturity analysis of the lease payments due to IBM on sales-type and direct financing leases over the next five years and thereafter, as well as a reconciliation of the undiscounted cash flows to the financing receivables recognized in the Consolidated Balance Sheet at December 31, 2025.
| ($ in millions) | ||||||||
| Total | ||||||||
| 2026 | $ | 1,470 | ||||||
| 2027 | 1,227 | |||||||
| 2028 | 874 | |||||||
| 2029 | 509 | |||||||
| 2030 | 203 | |||||||
| Thereafter | 55 | |||||||
| Total undiscounted cash flows | $ | 4,338 | ||||||
Present value of lease payments (recognized as financing receivables) (1) | 3,858 | |||||||
| Difference between undiscounted cash flows and discounted cash flows | $ | 479 | ||||||
(1)The present value of the lease payments will not equal the financing receivables balances in note K, "Financing Receivables," due to certain items, including IDCs, allowance for credit losses and residual values, which are included in the financing receivables balances, but are not included in the future lease payments.
Free Sentinel
Track for freeWant the next INTERNATIONAL BUSINESS MACHINES CORP leases disclosure the moment it drops?
Set a Sentinel and we'll alert you the moment INTERNATIONAL BUSINESS MACHINES CORP's next filing hits EDGAR. No credit card, your email never gets sold.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 26, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 25, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Feb 28, 2017 | |
| 2015 | Feb 23, 2016 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.