IBM to Begin Expensing Equity Compensation in F...

IBM
                  

IBM today announced that the company will begin to expense equity compensation
when it reports its first quarter 2005 financial results on April 18.

IBM will adopt 'Statement of Financial Accounting Standards (SFAS) 123(R) --
Share-based Payment,' which requires companies to expense costs related to
share-based payments to employees for periods beginning after June 15, 2005.

The company said the decision and timing were based on the guidance provided
last week in Staff Accounting Bulletin #107 issued by the U.S. Securities and
Exchange Commission's Office of the Chief Accountant and its Division of
Corporate Finance.

In accordance with SFAS No. 123(R), and in order to provide a consistent
year-to-year comparison of financial results, the company also will restate
prior period financial results to include the impact of share-based compensation
expenses.

Full-year 2004 incremental expense for stock-based compensation was $0.55 per
common share.

Webcast

A Webcast hosted by IBM Senior Vice President and Chief Financial Officer Mark
Loughridge will begin at 5:00 p.m. EDT, today. It is available at
www.ibm.com/investor. Replays will be available within 24 hours after completion
of the Webcast.

    CONTACT: IBM
             John Bukovinsky, 914-499-6212
             [e-mail]