Dividend Declaration

IBM
                  

          IBM Board Approves Regular Quarterly Cash Dividend

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

This is the 355th consecutive quarter that IBM has paid a dividend to its
stockholders.

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