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Microsoft Excel LibreOffice Calc

International Business Machines Corp. (IBM)

Analysis of Debt

Advanced level

Total Debt (Carrying Amount)

International Business Machines Corp., balance sheet: debt

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Short-term debt
Long-term debt
Total debt (carrying amount)

Based on: 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-28), 10-K (filing date: 2016-02-23), 10-K (filing date: 2015-02-24).

Debt item Description The company
Total debt (carrying amount) Sum of the carrying values as of the balance sheet date of all debt plus capital lease obligations. International Business Machines Corp.’s total debt increased from 2016 to 2017 but then slightly decreased from 2017 to 2018.

Total Debt (Fair Value)

Microsoft Excel LibreOffice Calc
Dec 31, 2018
Selected Financial Data (US$ in millions)
Short-term debt
Long-term debt
Total debt (fair value)
Financial Ratio
Debt, fair value to carrying amount ratio

Based on: 10-K (filing date: 2019-02-26).

Weighted-average Interest Rate on Debt

Post-swap weighted-average interest rate on debt:

Interest Rate Debt Amount1 Interest Rate × Debt Amount Weighted-average Interest Rate2
Total

Based on: 10-K (filing date: 2019-02-26).

1 US$ in millions

2 Weighted-average interest rate = 100 × ÷ =

Interest Costs Incurred

International Business Machines Corp., interest costs incurred

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Cost of financing
Interest expense
Interest capitalized
Total interest paid and accrued

Based on: 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-28), 10-K (filing date: 2016-02-23), 10-K (filing date: 2015-02-24).

Debt item Description The company
Interest expense Amount of the cost of borrowed funds accounted for as interest expense for debt. International Business Machines Corp.’s interest expense decreased from 2016 to 2017 but then increased from 2017 to 2018 exceeding 2016 level.
Interest capitalized Amount of interest costs capitalized disclosed as an adjusting item to interest costs incurred. International Business Machines Corp.’s interest capitalized increased from 2016 to 2017 but then slightly decreased from 2017 to 2018 not reaching 2016 level.
Total interest paid and accrued Total interest costs incurred during the period and either capitalized or charged against earnings. International Business Machines Corp.’s total interest paid and accrued increased from 2016 to 2017 and from 2017 to 2018.

Adjusted Interest Coverage Ratio

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (US$ in millions)
Net income attributable to IBM
Add: Net income attributable to noncontrolling interest
Less: Income (loss) from discontinued operations, net of tax
Add: Income tax expense
Add: Interest expense
Earnings before interest and tax (EBIT)
 
Total interest paid and accrued
Financial Ratio With and Without Capitalized Interest
Interest coverage ratio (without capitalized interest)1
Adjusted interest coverage ratio (with capitalized interest)2

Based on: 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-28), 10-K (filing date: 2016-02-23), 10-K (filing date: 2015-02-24).

2018 Calculations

1 Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest expense
= ÷ =

2 Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Total interest paid and accrued
= ÷ =

Solvency ratio Description The company
Adjusted interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments (including capitalized interest). International Business Machines Corp.’s adjusted interest coverage ratio deteriorated from 2016 to 2017 and from 2017 to 2018.