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IBM Makes Year-End Contribution to U.S. Pension Fund

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ARMONK, N.Y. - 31 Dec 2002: IBM today announced that it has restored the company's U.S. pension plan to fully funded status, as measured by its accumulated benefit obligation (ABO), through a contribution of cash and stock. The contribution, completed today, totals approximately $3.95 billion, $2.09 billion or 52.9 percent in cash with the remaining $1.86 billion or 47.1 percent funded with 24,037,354 shares of IBM stock. The company previously announced, on Dec. 4, its intention to fully fund the U.S. pension plan by year-end.

The contribution was greater than the $3 billion estimated by the company in early December due to the performance of capital markets, which decreased the value of the pension plan's assets in the intervening weeks.

"Our free cash flow and our balance sheet are strong enough for us to fully fund the U.S. pension plan," said John R. Joyce, senior vice president and IBM chief financial officer. "At the same time, we made a number of strategic investments throughout the year to better position our company to meet the changing requirements of our customers in this new 'ebusiness on demand' world."

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