8 Global Financing2502148239841386 34

Revenues from Europe/Middle East/Africa were$37.0 billion, an increase of 7 percent (3 percent, adjusting for currency).Asia-Pacific revenues increased 8 percent (2 percent, adjusting for currency) to$21.1 billion. OEM revenues were $2.7 billion, down 22 percent compared with2007. Revenues from the company's growth markets organization increased 10percent (10 percent, adjusting for currency) and represented 18 percent ofgeographic revenues. Revenues from the Global Technology Services segment totaled $39.3 billion, anincrease of 9 percent (6 percent, adjusting for currency) compared with 2007.Revenues from the Global Business Services segment were $19.6 billion, up 9percent (5 percent, adjusting for currency) Total services signings were $57.2billion. Software segment revenues in 2008 totaled $22.1 billion, an increase of11 percent (8 percent, adjusting for currency). Systems and Technology segmentrevenues were $19.3 billion, a decrease of 10 percent (11 percent, adjusting forcurrency). Global Financing segment revenues totaled $2.6 billion, an increaseof 2 percent (essentially flat, adjusting for currency).

IBM ended 2008 with $12.9 billion of cash on hand and generated free cash flowof $14.3 billion, up $1.9 billion year over year, excluding Global Financingreceivables. Shares repurchased totaled approximately $10.6 billion on a cash-paid basis in2008. The weighted-average number of diluted common shares outstanding in 2008was 1.38 billion compared with 1.45 billion shares in 2007. As of December 31,2008, there were 1.34 billion basic common shares outstanding. Debt, including Global Financing, totaled $33.9 billion, compared with $35.3billion at year-end 2007. From a management segment view, Global Financing debttotaled $24.4 billion versus $24.5 billion at year-end 2007, resulting in adebt-to-equity ratio of 7.0 to 1. Non-global financing debt totaled $9.6billion, a decrease of $1.2 billion since year-end 2007.

This decrease coupledwith a non-cash adjustment related to year-end pension remeasurements, which isreflected as a reduction in stockholders' equity, resulted in adebt-to-capitalization ratio of 49.0 percent as compared to 30.0 percent atyear-end 2007. Forward-Looking and Cautionary Statements Except for the historical information and discussions contained herein,statements contained in this release may constitute forward-looking statementswithin the meaning of the Private Securities Litigation Reform Act of 1995.These statements involve a number of risks, uncertainties and other factors thatcould cause actual results to differ materially, including the company's failureto continue to develop and market new and innovative products and services andto keep pace with technological change; competitive pressures; failure to obtainor protect intellectual property rights; breaches of the company's data securitymeasures; changes in the economic environment and corporate IT spending budgets;fluctuations in revenues and purchases, and volatility of stock prices; thecompany's ability to attract and retain key personnel and its reliance oncritical skills; adverse affects from tax matters; environmental matters;currency fluctuations and customer financing risks; customer credit risk onreceivables; risks from investing in growth opportunities; the company's failureto maintain the adequacy of its internal controls; the company's use of certainestimates and assumptions; dependence on certain suppliers; changes in thefinancial or business condition of the company's distributors or resellers; thecompany's ability to successfully manage acquisitions and alliances; failure tohave sufficient insurance; legal, political, health and economic conditions;risk factors related to IBM securities; and other risks, uncertainties andfactors discussed in the company's Form 10-Q, Form 10-K and in the company'sother filings with the U.S. The company assumes no obligationto update or revise any forward-looking statements. Presentation of Information in this Press Release In an effort to provide investors with additional information regarding thecompany's results as determined by generally accepted accounting principles(GAAP), the company has also disclosed in this press release the followingnon-GAAP information which management believes provides useful information toinvestors: IBM Results - adjusting for free cash flow; adjusting for currency (i.e., at constant currency); adjusting for estimated acquisitions impacts.The rationale for management's use of non-GAAP measures is included as part ofthe supplementary materials presented within the fourth-quarter earningsmaterials. These materials are available on the IBM investor relations Web siteat and are being included in Attachment II ("Non-GAAPSupplementary Materials") to the Form 8-K that includes this press release andis being submitted today to the SEC. Conference Call and Webcast IBM's regular quarterly earnings conference call is scheduled to begin at 4:30p.m EST, today. Investors may participate by viewing the Webcast at

INTERNATIONAL BUSINESS MACHINES CORPORATION COMPARATIVE FINANCIAL RESULTS (Dollars in millions except per share amounts) Three Months Twelve MonthsEnded December 31, Ended December 31, PercentPercent20082007Change 20082007ChangeREVENUE Global Technology Services $9,623$9,997-3.7 $39,264 $36,103 8.8 Gross margin 34.9 30.1 32.6 29.9 Global Business Services 4,709 4,933 -4.5 19,62818,0418.8 Gross margin 28.7 23.1 26.7 23.5 Systems and Technology 5,425 6,796 -20.219,28721,317-9.5 Gross margin 39.9 45.7 38.1 39.7 Software 6,420 6,259 2.622,08919,98210.5 Gross margin 87.7 87.1 85.4 85.2 Global Financing 660 668 -1.3 2,559 2,502 2.3 Gross margin 50.0 45.5 51.3 46.7 Other169 212 -20.2803 842 -4.6 Gross margin 61.6 -15.8 13.4 4.4TOTAL REVENUE27,00628,866-6.4 103,630 98,7864.9 GROSS PROFIT 12,93612,970-0.3 45,66141,7299.4 Gross margin 47.9 44.9 44.1 42.2 EXPENSE AND OTHER INCOMES,G&A5,832 6,016 -3.1 23,38622,0606.0 of revenue 21.6 20.8 22.6 22.3 R,D&E1,528 1,586 -3.6 6,337 6,153 3.0 of revenue 5.75.5 6.16.2Intellectualproperty and custom development income (328 )(236 )38.7 (1,153 )(958 )20.4 Other (income)and expense(97)(98)-1.5 (298 )(626 )-52.4 Interest expense 192 214 -10.6673 611 10.3 TOTAL EXPENSE AND OTHER INCOME 7,127 7,481 -4.7 28,94527,2406.3 of revenue 26.4 25.9 27.9 27.6 INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES5,808 5,489 5.816,71514,48915.4 Pre-tax margin 21.5 19.0 16.1 14.7 Provision for income taxes 1,382 1,537 -10.14,381 4,071 7.6 Effective tax rate 23.8 28.0 26.2 28.1 INCOME FROM CONTINUINGOPERATIONS 4,427 3,951 12.0 12,33410,41818.4 Net margin 16.4 13.7 11.9 10.5 DISCONTINUEDOPERATIONSIncome/(loss) fromdiscontinued opera- tions- 1- (0 )NET INCOME $4,427$3,95212.0 $12,334 $10,418 18.4 EARNINGS/(LOSS)PERSHARE OF COMMON STOCK:ASSUMING DILUTION CONTINUINGOPERATIONS $3.28 $2.80 17.1 $8.93 $7.18 24.4 DISCONTINUEDOPERATIONS - 0.00 - (0.00)TOTAL$3.28 $2.80 17.1 $8.93 $7.18 24.4 BASIC CONTINUINGOPERATIONS $3.31 $2.85 16.1 $9.07 $7.32 23.9 DISCONTINUEDOPERATIONS - 0.00 - (0.00)TOTAL$3.31 $2.86 15.7 $9.07 $7.32 23.9 WEIGHTED-AVERAGENUMBER OF COMMONSHARES OUT- STANDING (M's)ASSUMING DILUTION1,347.9 1,412.91,381.8 1,450.6 BASIC1,339.1 1,384.11,359.8 1,423.0INTERNATIONAL BUSINESS MACHINES CORPORATIONCONSOLIDATED STATEMENT OF FINANCIAL POSITION AtAt(Dollars in millions)December 31,December 31,Percent20082007ChangeASSETSCash, cash equivalents,and marketable securities$12,907 $16,146 -20.1Receivables - net, inventories,prepaid expenses 36,09737,031-2.5 Plant, rental machines,and other property - net 14,30515,081-5.1 Investments and other assets 46,21552,172-11.4TOTAL ASSETS $109,524$120,431-9.1 LIABILITIES AND STOCKHOLDERS' EQUITYTotal debt $33,926 $35,274 -3.8 Accounts payable, taxes, and accruals 31,19932,076-2.7 Other liabilities30,93424,61225.7 TOTAL LIABILITIES96,05891,9624.5STOCKHOLDERS' EQUITY13,46528,470-52.7 TOTAL LIABILITIES ANDSTOCKHOLDERS' EQUITY $109,524$120,431-9.1 Reflects a non-cash adjustment related to year-end pension remeasurementsin both 2008 and 2007, as required by FAS 158 , "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans."INTERNATIONAL BUSINESS MACHINES CORPORATIONSEGMENT DATAFOURTH-QUARTER 2008Pre-taxIncome (Loss) From (Dollars in millions) -Revenue -ContinuingPre-taxExternal InternalTotalOperationsMargin SEGMENTSGlobal Technology Services$9,623$383 $10,007 $1,437 14.4 Y-T-Y Change-3.7 -2.4-3.7 35.5Global Business Services4,709 2674,977 74014.9 Y-T-Y Change-4.5 -6.9-4.7 26.0Systems and Technology5,425 2495,674 72212.7 Y-T-Y Change-20.23.8 -19.4-47.1 Software6,420 7207,139 2,78939.1 Y-T-Y Change2.61.0 2.414.6Global Financing660 5251,184 45238.2 Y-T-Y Change-1.3 18.06.432.4TOTAL REPORTABLE SEGMENTS 26,8372,14428,9816,14021.2 Y-T-Y change-6.3 3.2 -5.7 6.1 Eliminations / Other169 (2,144)(1,975 )(331)TOTAL IBM CONSOLIDATED$27,006 $0 $27,006 $5,808 21.5 Y-T-Y Change-6.4 -6.4 5.8 FOURTH-QUARTER 2007Pre-taxIncome (Loss) From (Dollars in millions) -Revenue -ContinuingPre-taxExternal InternalTotalOperationsMarginSEGMENTSGlobal Technology Services$9,997$393 $10,390 $1,061 10.2Global Business Services4,933 2875,220 58811.3Systems and Technology6,796 2407,036 1,36419.4Software6,259 7126,971 2,43334.9Global Financing668 4451,113 34130.7TOTAL REPORTABLE SEGMENTS 28,6542,07730,7315,78718.8Eliminations / Other212 (2,077)(1,865 )(298)TOTAL IBM CONSOLIDATED$28,866 $0 $28,866 $5,489 19.0 INTERNATIONAL BUSINESS MACHINES CORPORATION SEGMENT DATATWELVE-MONTHS 2008Pre-tax Income(Loss)From(Dollars in millions) - Revenue Continuing Pre-taxExternalInternalTotal Operations Margin SEGMENTSGlobal Technology Services$39,264$1,546 $40,810$4,60711.3 Y-T-Y Change8.8 -5.58.1 29.5 Global Business Services19,628 1,04420,671 2,681 13.0 Y-T-Y Change8.8 -12.5 7.5 29.9 Systems and Technology19,287 88220,169 1,550 7.7 Y-T-Y Change-9.5-11.7 -9.6-28.0 Software22,089 2,76124,850 7,075 28.5 Y-T-Y Change10.514.310.917.9 Global Financing2,5591,8924,4511,617 36.3 Y-T-Y Change2.3 27.711.716.7 TOTAL REPORTABLE SEGMENTS 102,8278,125110,95117,53115.8 Y-T-Y Change5.0 5.2 5.0 15.6 Eliminations / Other803(8,125)(7,322)(815 ) TOTAL IBM CONSOLIDATED$103,630 $0 $103,630 $16,715 16.1 Y-T-Y Change4.9 4.9 15.4 TWELVE-MONTHS 2007Pre-tax Income(Loss)From(Dollars in millions) - Revenue Continuing Pre-taxExternalInternalTotal Operations Margin SEGMENTSGlobal Technology Services$36,103$1,636 $37,739$3,5579.4 Global Business Services18,041 1,19319,234 2,064 10.7 Systems and Technology21,317 99822,315 2,153 9.6 Software19,982 2,41622,398 6,002 26.8 Global Financing2,5021,4823,9841,386 34.8 TOTAL REPORTABLE SEGMENTS 97,944 7,726105,67015,16314.3 Eliminations / Other842(7,726)(6,884)(674 ) TOTAL IBM CONSOLIDATED$98,786$0 $98,786$14,489 14.7 IBM Michael Fay, 914-499-6107 orJohn Bukovinsky, 732-618-3531 Intnl Bus Mach Copyright Business Wire 2009. The body language and demeanor on the sideline Saturday night was much the same as when Auburn was in the final throes of the Tuberville regime.Even Chizik's own coaching staff had a look of resignation on their faces as LSU sent in the reserves to finish off the Auburn Tigers in the fourth quarter.Gene Chizik is a fine Defensive Coordinator, but he doesn't seem to have what it takes to be a Head Coach anywhere much less in an upper-echelon SEC football program like Auburn's.The question is why did this happen in the first placeWhy would Auburn go after a 5-15 coach of a lower tier school like Iowa State and why would they not just hire a proven coachThe answer is simple, they liked him.Gene Chizik has been one of the Auburn family at one time and that is one of the litmus tests for becoming a Head Coach at Auburn these days.The same thing was true of other candidates for the Auburn job this time with Will Muschamp and Bobby Petrino.There is no doubt in my mind that Auburn wanted Muschamp, or Bobby Petrino, but they were already taken, so through the process of elimination Gene Chizik landed the job.The powers that be at Auburn like Pat Dye, Bobby Lowder and Jimmy Rane got their way in this case and here we are today 5-3 headed for a possible 6-6 season and little hope of better days ahead.The painful truth is it doesn't get any easier in the weeks to come. Auburn still must face Ole Miss, Georgia and Alabama and if they do not upset at least one of those teams they will be faced with being left out of the Bowl picture for a second year in a row.Chizik has yet to beat a ranked team and has no signature wins at Auburn or his former school Iowa State to encourage his team or fans into believing he can beat anyone other than teams like Ball State or Miss State.Some may want to blame the lack of talent, but that just doesn't fly.Auburn is loaded with SEC caliber talent. Auburn's recruiting classes ranked No.13, 10, 7, 20, 19 in the last five years. That gives them a very solid 13 ranking in recruiting.That should be at least sufficient to beat teams like Kentucky at home.The there is the question of what has happened to Auburn offenseThe answer is simple: It is no longer an unknown and it is no longer a mystery.Earlier in the season I put forth the theory that Malzahn's offense would become ineffective as soon as SEC defensive coaches had time to figure it out.I compared it to a batter facing a new pitcher, the results would improve the more the batter faces that pitcher. It would appear the SEC has this offense figured out.The question has to be asked: Can Chizik turn things around, or could he lose control of his team completelyThat is very possible judging by the way they are playing and the way this team is acting.