# Long-Term Debt

December 31, 1978 | December 31, 1977

| International Business Machines Corporation: |
| --- |
| 3½% promissory notes, due 1980 to 1988 | $ 79,500 | $ 90,250 |
| Subsidiaries operating in non-U.S. countries (average interest rate at December 31, 1978, in parentheses) payable in: |
| U.S. dollars, due 1980 to 1990 (11.6%) | 79,305 | 59,045 |
| French francs, due 1980 to 1991 (8.4%) | 65,681 | 60,652 |
| Belgian francs, due 1980 to 1983 (7.5%) | 14,957 | 15,643 |
| Canadian dollars, due 1983 to 1991 (8.8%) | 13,473 | 18,200 |
| Other currencies, due 1980 to 1999 (8.4%) | 32,618 | 11,986 |
| Total | 206,034 | 165,526 |
| Long-term debt at December 31, 1978, was payable: |
| 1980 | $ 41,748 |
| 1981 | 49,859 |
| 1982 | 28,211 |
| 1983 | 42,777 |
| 1984 | 19,798 |
| 1985-1989 | 81,697 |
| 1990-1999 | 21,444 |
| Total | $ 285,534 |

## Litigation

In January, 1969, the Department of Justice filed a civil antitrust complaint against IBM under Section 2 of the Sherman Antitrust Act, charging the company with monopolizing commerce in general purpose digital computers in the United States. Trial of the case began in May, 1975, and is currently in progress.

The government continues to seek divestiture relief, requesting that IBM be reorganized into several independent and competing organizations and that IBM be enjoined from continuing its alleged monopolistic practices.

The lawsuit filed by Greyhound Computer Corporation in 1969, alleging Federal antitrust law violations, is in the pretrial discovery stage for a second trial. An earlier trial of Greyhound's claims in 1972 had resulted in a directed verdict in favor of IBM, but in 1977 the United States Court of Appeals for the Ninth Circuit granted Greyhound's petition for a new trial. Greyhound seeks damages in the amount of $324 million, after trebling, and injunctive relief.

Six private lawsuits instituted against IBM in 1973 and 1974, alleging Federal antitrust law violations, remain in progress. These cases were consolidated for purposes of many pretrial procedures, but remain separate actions. The plaintiffs in these actions seek damages, trebled in accordance with the antitrust laws, and in some cases, injunctive relief. The lawsuits of Hudson General Corporation and DPF Incorporated are in the pretrial discovery stage and trial of the Transamerica Computer Company case is currently in progress. These plaintiffs seek damages which, after trebling, aggregate $666 million.

The three cases which have been tried thus far have resulted in the dismissal of the antitrust claims against IBM. In the California Computer Products case, in February, 1977, at the close of the plaintiff's case, the District Court entered an order directing a verdict in favor of IBM and dismissing the action. California Computer Products, which is appealing the decision, claims damages which, after trebling, aggregate $306 million. In the Forro Precision case, $36 million in damages, after trebling, were sought. After trial, the antitrust charges against IBM were dismissed, and non-antitrust damage verdicts of $2.7 million for Forro and $3 million for IBM were entered. Both parties are appealing. Memorex Corporation, on behalf of itself and two of its subsidiaries, sought $3,150 million in damages, after trebling. Trial of the major portion of this claim, involving Memorex Corporation and a U.S. subsidiary, commenced in January, 1978. In August, 1978, after the jury was unable to reach a verdict, the District Court entered an order directing a verdict in favor of IBM and dismissing the action. Memorex is appealing the decision.

IBM has denied the charges in all of these cases and is vigorously defending each action.

An investigation of IBM's business practices by the Commission of the European Economic Community, commenced in 1974, continues. No charges have been filed.

## Renegotiation

The income earned on certain business with the Federal government is subject to review by the Renegotiation Board under the Renegotiation Act of 1951. In January, 1979, the Board determined that IBM made "excessive profits" of $14 million in 1969 and $26.2 million in 1970. IBM disagrees with the Board's determinations and intends to contest them in the United States Court of Claims. After tax credits are applied, the refundable amounts would be reduced to $4.3 million for 1969 and $10.7 million for 1970. The years 1971 through September 1976, when the Renegotiation Act expired, are still subject to review.