IBM to Begin Expensing Equity Compensation in First Quarter 2005 Financial Results

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ARMONK, N.Y. - 05 Apr 2005: -- 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.

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 Replays will be available within 24 hours after completion of the Webcast.


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