Dividend Declaration

IBM
                  

           Ibm Board Approves Increase of Regular Quarterly
                             Cash Dividend

The IBM Board of Directors today declared a regular quarterly cash
dividend of $.18 per common share, payable June 10, 2004 to
stockholders of record May 10, 2004.

Today's dividend declaration represents an increase of $.02, or 12.5
percent versus the prior quarterly dividend of $.16 per common share.
This is the largest single percentage increase in the IBM dividend in
seven years.

IBM has increased the quarterly dividend nine times since 1996,
representing a total increase of 188 percent.

With the payment of the June 10, 2004 dividend, IBM will have paid 354
consecutive quarterly dividends, starting in 1916.

CONTACT: IBM
         Edward Barbini, 914-499-6565
         [e-mail]