UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report: August 31, 2010

(Date of earliest event reported)

INTERNATIONAL BUSINESS MACHINES CORPORATION

(Exact name of registrant as specified in its charter)

914-499-1900

(Registrant’s telephone number)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01 (Regulation FD Disclosure)

Attachment I of this Form 8-K contains information that is being posted on IBM’s Investor Relations website (www.ibm.com/investor/). All of the information in Attachment I is hereby furnished.

IBM’s web site (www.ibm.com) contains a significant amount of information about IBM, including financial and other information for investors (www.ibm.com/investor/).  IBM encourages investors to visit its various web sites from time to time, as information is updated and new information is posted.

2

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

3

IBM provides historical data in preparation for 2011 reporting changes

August 31, 2010

Overview

At its Investor Briefing on May 12, 2010, IBM announced the introduction of Operating Earnings as the basis for its 2015 Roadmap.  Operating Earnings is a non-GAAP measure that IBM defines as GAAP results that are adjusted to exclude the effects of certain acquisition-related charges and retirement-related costs.

For the balance of 2010, IBM will continue to focus on GAAP results in its earnings report.  This will allow the company to finish the 2010 Roadmap on the basis on which it was introduced.  As outlined in the Investor Briefing materials, beginning in 2011, IBM will separately report business results as operating and non-operating categories, in addition to providing GAAP information.  IBM will also expand on the discussion of Operating Earnings in its quarterly earnings report and provide future guidance on that basis.  To facilitate the transition to the new reporting format, IBM provided a summary level view of Operating Earnings for 2008, 2009, and the first half of 2010 as supplemental information in its second quarter 2010 earnings presentation, and today is providing additional relevant historical information.

The company believes that the presentation of Operating Earnings will provide a number of key benefits to investors:

·                  provide better transparency and clarity into both the operational results of the business and the impact to IBM of the performance of the company’s pension plans;

·                  improve visibility to the operational effects of management decisions, offer more effective metrics for evaluation of management’s performance, and better align external reporting with how the company will manage its business;

·                  enable better comparison to peer companies, many of which have been adjusting for these acquisition-related items, and/or have no defined benefits pension plans or plans with a less significant impact to their financial results; and

·                  allow the company to provide a long term strategic view of the business.

Definition

Operating Earnings is a view of the company’s consolidated earnings presentation under GAAP which excludes certain acquisition-related charges and retirement-related costs, and their related tax impacts.  There will be no change to the company’s balance sheet or cash flow presentation.

For acquisitions, Operating Earnings will exclude (i) the amortization of purchased intangible assets, (ii) acquisition-related in-process research and development, (iii) other acquisition-related charges such as transaction costs, applicable restructuring and related expenses and (iv) tax charges related to acquisition integration.  In the company’s view, these charges are not related to the ongoing operations of the

company.  In the technology sector, it is common practice to provide earnings information on a non-GAAP basis that excludes acquisition-related items.

n/a* - Prior to 2009, under FAS141 “Business Combinations”, these charges were recorded in goodwill

Within retirement-related costs, the company considers certain items as operating and others as non-operating.

Operating retirement-related costs include defined benefit plan and other postretirement benefit plan service cost, amortization of prior service cost, and the cost of defined contribution plans, as these costs are related to current and previous year’s employee benefits. The company considers these to be operating costs of the business, and these items will be included in Operating Earnings.

The debt and equity markets can have a significant impact on the company’s retirement-related costs and these market forces are not under direct management control.  Non-operating retirement-related activity, therefore, includes both income and charges that are driven by changes in pension plan assets and liabilities which are primarily related to market performance.  The non-operating retirement-related items include (i) defined benefit plan and other postretirement benefit plan interest cost, (ii) expected return on plan assets, (iii) amortized actuarial gains/losses, and (iv) the impacts of any plan curtailments/settlements and multi-employer/pension insolvency/other costs.  The company considers these to be outside the operational performance of the business and the costs are not necessarily indicative of current or future cash flow requirements.  These items will be excluded from Operating Earnings and reported separately.

The net impact to earnings per share of the acquisition-related and non-operating pension adjustments is ($.03) in 2008 and $.02 in 2009.

Historical Information

The three attached exhibits provide historical data for 2008, 2009, and the first two quarters of 2010 under this approach.

·                  Exhibit 1 is a further breakout to the supplemental information provided during the company’s second quarter 2010 earnings announcement regarding consolidated Gross Profit, Selling, general and administrative (SG&A), and Research, development and engineering (RD&E).

·                  Exhibit 2 provides a view of the company’s segment pre-tax income using this reporting method.

·                  Exhibit 3 provides a breakout of External Gross Profit margin by segment.

Additional information on IBM’s 2010 Investor Briefing and the introduction of the 2015 Roadmap can be found on IBM’s investor website at http://www.ibm.com/investor/events/investor0510/index.phtml.

Exhibit 1

International Business Machines Corporation

Adjustments to GAAP Net Income, Gross Profit Margin, S,G&A, R,D&E, and Diluted Earnings Per Share

(Unaudited, Dollars in millions except per share amounts)

Exhibit 1 (cont)

International Business Machines Corporation

Adjustments to GAAP Net Income, Gross Profit Margin, S,G&A, R,D&E, and Diluted Earnings Per Share

(Unaudited, Dollars in millions except per share amounts)

Exhibit 1 (cont)

International Business Machines Corporation

Adjustments to GAAP Net Income, Gross Profit Margin, S,G&A, R,D&E, and Diluted Earnings Per Share

(Unaudited, Dollars in millions except per share amounts)

(Amounts may not add due to rounding)

(The tax impact on the Non-GAAP (Operational) Pre-tax income will be calculated under the same accounting principles applied to the As Reported Pre-tax income under ACS 740, which employs an annual effective tax rate concept to the results.)

Exhibit 2

International Business Machines Corporation

Adjustments to Segment Pre-tax Income

(Unaudited, Dollars in millions)

Exhibit 2 (cont)

International Business Machines Corporation

Adjustments to Segment Pre-tax Income

(Unaudited, Dollars in millions)