Company Website:
http://www.ibm.com
ARMONK, N.Y. -- (Business Wire)
IBM (NYSE:IBM)
- Diluted EPS from continuing operations:
- Operating (non-GAAP): $2.91, up 9 percent;
- GAAP: $2.44, flat year-to-year;
- Net income from continuing operations:
- Operating (non-GAAP): $2.9 billion, up 4 percent;
- GAAP: $2.4 billion, down 5 percent;
- Gross profit margin from continuing operations:
- Operating (non-GAAP): 49.3 percent, up 80 basis points;
- GAAP: 48.2 percent, up 50 basis points;
- Revenue from continuing operations: $19.6 billion:
- Flat year-to-year adjusting for currency and divested
businesses (8 percent and 4 percent, respectively); down 12
percent as reported;
- System z mainframe more than doubled;
- Strategic imperatives revenue up more than 30 percent adjusting for
currency and divested businesses; up more than 20 percent, as reported:
- Cloud revenue up more than 75 percent adjusting for currency
and divested businesses; up more than 60 percent as reported;
- For cloud delivered as a service, annual run rate of $3.8
billion compared to $2.3 billion in the first quarter of 2014;
- Business analytics revenue up more than 20 percent adjusting
for currency and divested businesses; up 12 percent as reported;
- Services backlog of $121 billion, flat year-to-year adjusting for
currency and divested businesses;
- Total shareholder return of $2.3 billion: dividends of $1.1 billion
and gross share repurchases of $1.2 billion;
- Maintain full-year expectations:
- Operating (non-GAAP) EPS of $15.75 to $16.50;
- Free cash flow flat year-to-year.
IBM (NYSE:IBM) today announced first-quarter 2015 diluted earnings from
continuing operations of $2.44 per share, flat year-to-year. Operating
(non-GAAP) diluted earnings from continuing operations were $2.91 per
share, compared with operating diluted earnings of $2.68 per share in
the first quarter of 2014, an increase of 9 percent.
First-quarter net income from continuing operations was $2.4 billion,
down 5 percent year-to-year, including the impact of $0.2 billion in
pension-related pre-tax charges for IBM Spain in the first quarter of
2015, resulting from a court ruling in Spain. Operating (non-GAAP) net
income from continuing operations was $2.9 billion compared with $2.8
billion in the first quarter of 2014, an increase of 4 percent. GAAP and
Operating (non-GAAP) results include workforce rebalancing charges of
$0.3 billion in the first quarter of 2015 and $0.9 billion in the
year-ago period.
For the first-quarter of 2015, IBM reported consolidated net income of
$2.3 billion or $2.35 of diluted earnings per share, including operating
net losses in discontinued operations related to the Microelectronics
business.
Total revenues from continuing operations for the first quarter of 2015
of $19.6 billion were down 12 percent, flat year-to-year adjusting for
currency and divested businesses, from the first quarter of 2014.
"In the first quarter we had a strong start to the year. Our strategic
imperatives growth rate accelerated, demonstrating the power of our
offerings in these new opportunities and contributing to improved
revenue performance. Our focus on higher value through portfolio
transformation and investment in key areas of the business drove
continued margin expansion,” said Ginni Rometty, IBM chairman, president
and chief executive officer.
First-Quarter GAAP – Operating (non-GAAP) Reconciliation
First-quarter operating (non-GAAP) diluted earnings from continuing
operations exclude $0.47 per share of charges: $0.14 per share for the
amortization of purchased intangible assets and other
acquisition-related charges, and $0.33 per share for retirement-related
charges, which includes the Spain pension-related charges.
Full-Year 2015 Expectations
IBM expects full-year 2015 GAAP diluted earnings per share of $14.17 to
$14.92, and operating (non-GAAP) diluted earnings per share of $15.75 to
$16.50. At this level of profit, IBM continues to expect free cash flow
to be flat year-to-year. The 2015 operating (non-GAAP) earnings
expectation excludes $1.58 per share of charges for amortization of
purchased intangible assets, other acquisition-related charges and
retirement-related charges.
Geographic Regions
The Americas’ first-quarter revenues were $9.3 billion, a decrease of 3
percent (up 2 percent adjusting for currency and divested businesses)
from the 2014 period. Revenues from Europe/Middle East/Africa were $6.1
billion, down 19 percent (down 2 percent adjusting for currency and
divested businesses). Asia-Pacific revenues decreased 18 percent (down 2
percent adjusting for currency and divested businesses) to $4.1 billion.
Growth Markets and Major Markets
Revenues from the company’s growth markets decreased 16 percent (down 1
percent adjusting for currency and divested businesses). Revenues from
the company’s major markets were down 11 percent (flat year-to-year
adjusting for currency and divested businesses).
Services
Global Services revenues decreased 12 percent (down 2 percent adjusting
for currency and divested businesses) to $12.2 billion. Global
Technology Services segment revenues were down 11 percent (down 1
percent adjusting for currency and divested businesses) to $7.9 billion.
Global Business Services segment revenues were down 13 percent (down 4
percent adjusting for currency and divested businesses) to $4.3 billion.
Pre-tax income from Global Technology Services was down 18 percent and
pre-tax margin decreased to 12.3 percent. Global Business Services
pre-tax income decreased 21 percent and pre-tax margin decreased to 13.4
percent.
The estimated services backlog as of March 31 was $121 billion, flat
year-to-year adjusting for currency and divested businesses.
Software
Revenues from the Software segment were down 8 percent to $5.2 billion
(down 2 percent adjusting for currency) compared with the first quarter
of 2014. Software pre-tax income increased 1 percent and pre-tax margin
increased to 31.4 percent.
Revenues from IBM’s key middleware products, which include WebSphere,
Information Management, Tivoli, Workforce Solutions and Rational
products, were $3.5 billion, down 5 percent (up 1 percent adjusting for
currency) versus the first quarter of 2014. Operating systems revenues
of $0.4 billion were down 15 percent (down 9 percent adjusting for
currency) compared with the prior-year quarter.
Hardware
Revenues for the Systems Hardware segment totaled $1.7 billion for the
quarter, down 23 percent (up 30 percent adjusting for currency and the
impact of the divested System x business) from the first quarter of
2014. Systems Hardware pre-tax income increased $0.5 billion.
Revenues from System z mainframe server products increased 118 percent
compared with the year-ago period (up 130 percent adjusting for
currency). Total delivery of System z computing power, as measured in
MIPS (millions of instructions per second), increased 95 percent.
Revenues from Power Systems were down 3 percent compared with the 2014
period (up 1 percent adjusting for currency). Revenues from System
Storage decreased 8 percent (down 2 percent adjusting for currency).
Financing
Global Financing segment revenues were down 10 percent (down 1 percent
adjusting for currency) in the first quarter to $0.5 billion. Pre-tax
income for the segment decreased 14 percent to $0.5 billion.
Gross Profit
The company’s total gross profit margin from continuing operations was
48.2 percent in the 2015 first quarter compared with 47.8 percent in the
2014 first-quarter period. Total operating (non-GAAP) gross profit
margin from continuing operations was 49.3 percent in the 2015 first
quarter compared with 48.5 percent in the 2014 first-quarter period,
with an increase in Hardware and an improving segment mix partially
offset by a decline in Services.
Expense
Total expense and other income from continuing operations decreased to
$6.5 billion, down 13 percent compared to the prior-year period.
Year-to-year results include the impact of currency and the divested
System x business, as well as lower workforce rebalancing charges,
partially offset by the Spain pension-related charges and prior year
gain for the divestiture of the customer care outsourcing business.
S,G&A expense of $5.4 billion decreased 15 percent year over year. R,D&E
expense of $1.3 billion decreased 7 percent year-to-year; the related
expense-to-revenue ratio increased to 6.6 percent compared with 6.3
percent in the year-ago period. Intellectual property and custom
development income decreased to $173 million compared with $207 million
a year ago. Other (income) and expense was income of $143 million
compared with prior-year income of $127 million. Interest expense
increased to $108 million compared with $105 million in the prior year.
Total operating (non-GAAP) expense and other income from continuing
operations decreased to $6.1 billion, down 17 percent compared with the
prior-year period. Operating (non-GAAP) S,G&A expense of $5.0 billion
decreased 18 percent compared with prior-year expense. Operating
(non-GAAP) R,D&E expense of $1.3 billion decreased 9 percent
year-to-year, reflecting the impact of currency and divested businesses;
the related expense-to-revenue ratio increased to 6.6 percent compared
with 6.4 percent in the year-ago period.
Pre-Tax Income
Pre-tax income from continuing operations decreased 6 percent to $3.0
billion. Pre-tax margin from continuing operations increased 1.0 points
to 15.3 percent. Operating (non-GAAP) pre-tax income from continuing
operations increased 3 percent to $3.6 billion and pre-tax margin was
18.4 percent, up 2.7 points.
***
IBM’s tax rate from continuing operations was 19.5 percent, down 1.0
points year over year; the operating (non-GAAP) tax rate was 20.0
percent, down 0.5 points compared to the year-ago period.
Net income margin from continuing operations increased 0.9 points to
12.3 percent. Total operating (non-GAAP) net income margin from
continuing operations increased 2.2 points to 14.8 percent.
The weighted-average number of diluted common shares outstanding in the
first-quarter 2015 was 992 million compared with 1.04 billion shares in
the same period of 2014. As of March 31, 2015, there were 985 million
basic common shares outstanding.
Debt, including Global Financing, totaled $38.8 billion, compared with
$40.8 billion at year-end 2014. From a management segment view, Global
Financing debt totaled $26.2 billion versus $29.1 billion at year-end
2014, resulting in a debt-to-equity ratio of 7.0 to 1. Core (non-global
financing) debt totaled $12.6 billion, an increase of $0.9 billion since
year-end 2014 and a decrease of $3.1 billion from the first quarter of
2014.
IBM ended the first-quarter 2015 with $8.8 billion of cash on hand and
generated free cash flow of $1.1 billion, excluding Global Financing
receivables, up $0.4 billion year over year. The company returned $2.3
billion to shareholders through $1.1 billion in dividends and $1.2
billion of gross share repurchases. The balance sheet remains strong,
and the company is well positioned to support the business over the long
term.
Forward-Looking and Cautionary Statements
Except for the historical information and discussions contained herein,
statements contained in this release may constitute forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements are based on the
company’s current assumptions regarding future business and financial
performance. These statements involve a number of risks, uncertainties
and other factors that could cause actual results to differ materially,
including the following: a downturn in economic environment and client
spending budgets; the company’s failure to meet growth and productivity
objectives, a failure of the company’s innovation initiatives; risks
from investing in growth opportunities; failure of the company’s
intellectual property portfolio to prevent competitive offerings and the
failure of the company to obtain necessary licenses; cybersecurity and
data privacy considerations; fluctuations in financial results, impact
of local legal, economic, political and health conditions; adverse
effects from environmental matters, tax matters and the company’s
pension plans; ineffective internal controls; the company’s use of
accounting estimates; the company’s ability to attract and retain key
personnel and its reliance on critical skills; impacts of relationships
with critical suppliers and business with government clients; currency
fluctuations and customer financing risks; impact of changes in market
liquidity conditions and customer credit risk on receivables; reliance
on third party distribution channels; the company’s ability to
successfully manage acquisitions, alliances and dispositions; risks from
legal proceedings; risk factors related to IBM securities; and other
risks, uncertainties and factors discussed in the company’s Form 10-Qs,
Form 10-K and in the company’s other filings with the U.S. Securities
and Exchange Commission (SEC) or in materials incorporated therein by
reference. Any forward-looking statement in this release speaks only as
of the date on which it is made. The company assumes no obligation to
update or revise any forward-looking statements.
Presentation of Information in this Press Release
In an effort to provide investors with additional information regarding
the company’s results as determined by generally accepted accounting
principles (GAAP), the company has also disclosed in this press release
the following non-GAAP information which management believes provides
useful information to investors:
IBM results and expectations --
-
presenting operating (non-GAAP) earnings per share from continuing
operations amounts and related income statement items;
-
adjusting for free cash flow;
-
adjusting for currency (i.e., at constant currency);
-
adjusting for the divestiture of the System x and the customer care
outsourcing businesses.
The rationale for management’s use of non-GAAP measures is included as
part of the supplemental materials presented within the first-quarter
earnings materials. These materials are available via a link on the IBM
investor relations Web site at www.ibm.com/investor
and are being included in Attachment II (“Non-GAAP Supplemental
Materials”) to the Form 8-K that includes this press release and is
being submitted today to the SEC.
Conference Call and Webcast
IBM’s regular quarterly earnings conference call is scheduled to begin
at 4:30 p.m. EDT, today. The Webcast may be accessed via a link at http://www.ibm.com/investor/events/earnings/1q15.html.
Presentation charts will be available shortly before the Webcast.
Financial Results Below (certain amounts may not add due to use
of rounded numbers; percentages presented are calculated from the
underlying whole-dollar amounts).
INTERNATIONAL BUSINESS MACHINES CORPORATION
|
COMPARATIVE FINANCIAL RESULTS
|
(Unaudited; Dollars in millions except per share amounts)
|
|
|
|
Three Months Ended
|
| |
March 31,
|
| | |
| |
|
Percent
|
| |
2015
| |
2014*
| |
Change
|
REVENUE
| | | | | | |
|
Global Technology Services **
| |
$
|
7,886
| | |
$
|
8,849
| | |
-10.9
|
%
|
Gross profit margin
| | |
37.4
|
%
| | |
38.8
|
%
| | |
| | | | | |
|
Global Business Services **
| | |
4,318
| | | |
4,964
| | |
-13.0
|
%
|
Gross profit margin
| | |
27.4
|
%
| | |
29.2
|
%
| | |
| | | | | |
|
Software
| | |
5,199
| | | |
5,661
| | |
-8.2
|
%
|
Gross profit margin
| | |
86.6
|
%
| | |
87.5
|
%
| | |
| | | | | |
|
Systems Hardware *
| | |
1,659
| | | |
2,143
| | |
-22.6
|
%
|
Gross profit margin
| | |
44.5
|
%
| | |
34.0
|
%
| | |
| | | | | |
|
Global Financing
| | |
461
| | | |
512
| | |
-9.9
|
%
|
Gross profit margin
| | |
49.6
|
%
| | |
46.1
|
%
| | |
| | | | | |
|
Other
| | |
67
| | | |
107
| | |
-37.5
|
%
|
Gross profit margin
| | |
-224.6
|
%
| | |
-163.7
|
%
| | |
| | | | | |
|
TOTAL REVENUE
| | |
19,590
| | | |
22,236
| | |
-11.9
|
%
|
| | | | | |
|
GROSS PROFIT
| | |
9,452
| | | |
10,627
| | |
-11.1
|
%
|
Gross profit margin
| | |
48.2
|
%
| | |
47.8
|
%
| | |
| | | | | |
|
EXPENSE AND OTHER INCOME
| | | | | | |
|
S,G&A
| | |
5,362
| | | |
6,272
| | |
-14.5
|
%
|
Expense to revenue
| | |
27.4
|
%
| | |
28.2
|
%
| | |
|
R,D&E
| | |
1,298
| | | |
1,402
| | |
-7.4
|
%
|
Expense to revenue
| | |
6.6
|
%
| | |
6.3
|
%
| | |
|
Intellectual property
| | | | | | |
and custom development
| | | | | | |
income
| | |
(173
|
)
| | |
(207
|
)
| |
-16.5
|
%
|
|
Other (income) and expense
| | |
(143
|
)
| | |
(127
|
)
| |
12.5
|
%
|
| | | | | |
|
Interest expense
| | |
108
| | | |
105
| | |
2.7
|
%
|
| | | | | |
|
TOTAL EXPENSE AND
| | | | | | |
OTHER INCOME
| | |
6,451
| | | |
7,444
| | |
-13.3
|
%
|
Expense to revenue
| | |
32.9
|
%
| | |
33.5
|
%
| | |
| | | | | |
|
INCOME FROM CONTINUING
| | | | | | |
OPERATIONS BEFORE INCOME TAXES
| | |
3,001
| | | |
3,183
| | |
-5.7
|
%
|
Pre-tax margin
| | |
15.3
|
%
| | |
14.3
|
%
| | |
|
Provision for income taxes
| | |
585
| | | |
653
| | |
-10.3
|
%
|
Effective tax rate
| | |
19.5
|
%
| | |
20.5
|
%
| | |
| | | | | |
|
INCOME FROM CONTINUING
| | | | | | |
OPERATIONS
| |
$
|
2,415
| | |
$
|
2,530
| | |
-4.6
|
%
|
Net margin
| | |
12.3
|
%
| | |
11.4
|
%
| | |
|
DISCONTINUED OPERATIONS
| | | | | | |
Loss from discontinued
| | | | | | |
operations, net of taxes
| | |
(88
|
)
| | |
(146
|
)
| | |
|
NET INCOME
| |
$
|
2,328
|
| |
$
|
2,384
|
| |
-2.4
|
%
|
|
EARNINGS PER SHARE
| | | | | | |
OF COMMON STOCK:
| | | | | | |
Assuming dilution
| | | | | | |
Continuing operations
| |
$
|
2.44
| | |
$
|
2.43
| | |
0.4
|
%
|
Discontinued operations
| |
|
($0.09
|
)
| |
|
($0.14
|
)
| | |
TOTAL
| |
$
|
2.35
|
| |
$
|
2.29
|
| |
2.6
|
%
|
|
Basic
| | | | | | |
Continuing operations
| |
$
|
2.45
| | |
$
|
2.44
| | |
0.4
|
%
|
Discontinued operations
| |
|
($0.09
|
)
| |
|
($0.14
|
)
| | |
TOTAL
| |
$
|
2.36
|
| |
$
|
2.30
|
| |
2.6
|
%
|
| | | | | |
|
WEIGHTED-AVERAGE NUMBER
| | | | | | |
OF COMMON SHARES OUT-
| | | | | | |
STANDING (M's):
| | | | | | |
Assuming dilution
| | |
992.3
| | | |
1,041.8
| | | |
Basic
| | |
988.1
| | | |
1,035.2
| | | |
|
* Reclassified to reflect discontinued operations presentation.
|
**Reclassified to conform with 2015 presentation.
|
|
INTERNATIONAL BUSINESS MACHINES CORPORATION
|
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
|
(Unaudited)
|
|
|
|
At
|
|
At
|
(Dollars in Millions)
| |
March 31,
| |
December 31,
|
| |
2015
| |
2014
|
ASSETS:
| | | | |
| | | |
|
Current Assets:
| | | | |
Cash and cash equivalents
| |
$
|
8,796
| | |
$
|
8,476
| |
Marketable securities
| | |
8
| | | |
0
| |
Notes and accounts receivable - trade
| | | | |
(net of allowances of $354 in 2015 and $336 in 2014)
| | |
8,806
| | | |
9,090
| |
Short-term financing receivables
| | | | |
(net of allowances of $484 in 2015 and $452 in 2014)
| | |
16,303
| | | |
19,835
| |
Other accounts receivable
| | | | |
(net of allowances of $41 in 2015 and $40 in 2014)
| | |
2,740
| | | |
2,906
| |
Inventories, at lower of average cost or market:
| | | | |
Finished goods
| | |
371
| | | |
430
| |
Work in process and raw materials
| |
|
1,599
|
| |
|
1,674
|
|
Total inventories
| | |
1,970
| | | |
2,103
| |
Deferred taxes
| | |
1,805
| | | |
2,044
| |
Prepaid expenses and other current assets
| |
|
5,890
|
| |
|
4,967
|
|
Total Current Assets
| | |
46,316
| | | |
49,422
| |
| | | |
|
Property, plant and equipment
| | |
38,303
| | | |
39,034
| |
Less: Accumulated depreciation
| |
|
27,793
|
| |
|
28,263
|
|
Property, plant and equipment - net
| | |
10,509
| | | |
10,771
| |
Long-term financing receivables
| | | | |
(net of allowances of $125 in 2015 and $126 in 2014)
| | |
9,820
| | | |
11,109
| |
Prepaid pension assets
| | |
2,690
| | | |
2,160
| |
Deferred taxes
| | |
4,374
| | | |
4,808
| |
Goodwill
| | |
29,871
| | | |
30,556
| |
Intangible assets - net
| | |
2,991
| | | |
3,104
| |
Investments and sundry assets
| |
|
5,466
|
| |
|
5,603
|
|
Total Assets
| |
$
|
112,037
|
| |
$
|
117,532
|
|
|
LIABILITIES:
| | | | |
| | | |
|
Current Liabilities:
| | | | |
Taxes
| |
$
|
3,539
| | |
$
|
5,084
| |
Short-term debt
| | |
4,532
| | | |
5,731
| |
Accounts payable
| | |
6,314
| | | |
6,864
| |
Compensation and benefits
| | |
3,328
| | | |
4,031
| |
Deferred income
| | |
12,162
| | | |
11,877
| |
Other accrued expenses and liabilities
| |
|
5,765
|
| |
|
6,013
|
|
Total Current Liabilities
| | |
35,640
| | | |
39,600
| |
| | | |
|
Long-term debt
| | |
34,295
| | | |
35,073
| |
Retirement and nonpension postretirement
| | | | |
benefit obligations
| | |
17,211
| | | |
18,261
| |
Deferred income
| | |
3,811
| | | |
3,691
| |
Other liabilities
| |
|
8,791
|
| |
|
8,892
|
|
Total Liabilities
| | |
99,747
| | | |
105,518
| |
|
EQUITY:
| | | | |
|
IBM Stockholders' Equity:
| | | | |
Common stock
| | |
52,928
| | | |
52,666
| |
Retained earnings
| | |
139,030
| | | |
137,793
| |
Treasury stock -- at cost
| | |
(151,975
|
)
| | |
(150,715
|
)
|
Accumulated other comprehensive income/(loss)
| |
|
(27,842
|
)
| |
|
(27,875
|
)
|
Total IBM stockholders' equity
| | |
12,141
| | | |
11,868
| |
| | | |
|
Noncontrolling interests
| |
|
148
|
| |
|
146
|
|
Total Equity
| |
|
12,289
|
| |
|
12,014
|
|
Total Liabilities and Equity
| |
$
|
112,037
|
| |
$
|
117,532
|
|
|
INTERNATIONAL BUSINESS MACHINES CORPORATION
|
CASH FLOW ANALYSIS
|
(Unaudited)
|
|
|
|
Three Months Ended
|
(Dollars in Millions)
| |
March 31,
|
| |
2015
|
|
2014
|
Net Cash from Operating Activities per GAAP:
| |
$
|
3,610
| | |
$
|
3,326
| |
| | | |
|
Less: the change in Global Financing (GF)
| | | | |
Receivables
| |
|
1,605
|
| |
|
1,807
|
|
Net Cash from Operating Activities
| | | | |
(Excluding GF Receivables)
| | |
2,004
| | | |
1,518
| |
| | | |
|
Capital Expenditures, Net
| | |
(923
|
)
| | |
(887
|
)
|
| | | |
|
Free Cash Flow
| | | | |
(Excluding GF Receivables)
| | |
1,081
| | | |
631
| |
| | | |
|
Acquisitions
| | |
(148
|
)
| | |
(264
|
)
|
Divestitures
| | |
19
| | | |
391
| |
Dividends
| | |
(1,088
|
)
| | |
(990
|
)
|
Share Repurchase
| | |
(1,165
|
)
| | |
(8,166
|
)
|
Non-GF Debt
| | |
361
| | | |
3,634
| |
Other (includes GF Receivables, and
| | | | |
GF Debt)
| | |
1,266
| | | |
3,402
| |
| | | |
|
Change in Cash, Cash Equivalents and
| | | | |
Short-term Marketable Securities
| |
$
|
327
|
| |
|
($1,361
|
)
|
|
INTERNATIONAL BUSINESS MACHINES CORPORATION
|
SEGMENT DATA
|
(Unaudited)
|
| |
| |
FIRST-QUARTER 2015
|
| | |
| |
| |
|
Pre-tax
|
| |
| | | | | | | |
Income/
| | |
| | | | | | | |
(Loss)
| | |
(Dollars in Millions)
| |
Revenue
| |
Continuing
| |
Pre-tax
|
| |
External
| |
Internal
| |
Total
| |
Operations
| |
Margin
|
SEGMENTS
| | | | | | | | | | |
| | | | | | | | | |
|
Global Technology Services
| |
$
|
7,886
| | |
$
|
195
| | |
$
|
8,081
| | |
$
|
994
| | |
12.3
|
%
|
Y-T-Y change
| | |
-10.9
|
%
| | |
-18.8
|
%
| | |
-11.1
|
%
| | |
-18.2
|
%
| | |
| | | | | | | | | |
|
Global Business Services
| | |
4,318
| | | |
131
| | | |
4,449
| | | |
597
| | |
13.4
|
%
|
Y-T-Y change
| | |
-13.0
|
%
| | |
-7.3
|
%
| | |
-12.8
|
%
| | |
-21.3
|
%
| | |
| | | | | | | | | |
|
Software
| | |
5,199
| | | |
964
| | | |
6,162
| | | |
1,936
| | |
31.4
|
%
|
Y-T-Y change
| | |
-8.2
|
%
| | |
3.3
|
%
| | |
-6.5
|
%
| | |
0.9
|
%
| | |
| | | | | | | | | |
|
Systems Hardware
| | |
1,659
| | | |
92
| | | |
1,751
| | | |
24
| | |
1.4
|
%
|
Y-T-Y change
| | |
-22.6
|
%
| | |
-45.3
|
%
| | |
-24.2
|
%
| | |
NM
| | | |
|
|
Global Financing
| | |
461
| | | |
586
| | | |
1,048
| | | |
515
| | |
49.2
|
%
|
Y-T-Y change
| | |
-9.9
|
%
| | |
-5.0
|
%
| | |
-7.2
|
%
| | |
-13.6
|
%
| | |
| | | | | | | | | |
|
TOTAL REPORTABLE SEGMENTS
| |
$
|
19,523
| | |
$
|
1,968
| | |
$
|
21,491
| | |
$
|
4,066
| | |
18.9
|
%
|
Y-T-Y change
| | |
-11.8
|
%
| | |
-6.3
|
%
| | |
-11.3
|
%
| | |
0.9
|
%
| | |
| | | | | | | | | |
|
Eliminations / Other
| | |
67
| | | |
(1,968
|
)
| | |
(1,901
|
)
| | |
(1,065
|
)
| | |
| | | | | | | | | |
|
TOTAL IBM CONSOLIDATED
| |
$
|
19,590
| | |
$
|
0
| | |
$
|
19,590
| | |
$
|
3,001
| | |
15.3
|
%
|
Y-T-Y change
| | |
-11.9
|
%
| | | | |
-11.9
|
%
| | |
-5.7
|
%
| | |
|
|
|
|
|
FIRST-QUARTER 2014*
|
| | | | | | | |
Pre-tax
| | |
| | | | | | | |
Income/
| | |
| | | | | | | |
(Loss)
| | |
(Dollars in Millions)
| |
Revenue
| |
Continuing
| |
Pre-tax
|
| |
External
| |
Internal
| |
Total
| |
Operations
| |
Margin
|
SEGMENTS
| | | | | | | | | | |
| | | | | | | | | |
|
Global Technology Services **
| |
$
|
8,849
| | |
$
|
241
| | |
$
|
9,089
| | |
$
|
1,215
| | |
13.4
|
%
|
| | | | | | | | | |
|
Global Business Services **
| | |
4,964
| | | |
141
| | | |
5,105
| | | |
759
| | |
14.9
|
%
|
| | | | | | | | | |
|
Software
| | |
5,661
| | | |
932
| | | |
6,593
| | | |
1,918
| | |
29.1
|
%
|
| | | | | | | | | |
|
Systems Hardware *
| | |
2,143
| | | |
168
| | | |
2,311
| | | |
(457
|
)
| |
-19.8
|
%
|
| | | | | | | | | |
|
Global Financing
| | |
512
| | | |
617
| | | |
1,129
| | | |
596
| | |
52.8
|
%
|
| | | | | | | | | |
|
TOTAL REPORTABLE SEGMENTS
| |
$
|
22,128
| | |
$
|
2,099
| | |
$
|
24,228
| | |
$
|
4,031
| | |
16.6
|
%
|
| | | | | | | | | |
|
Eliminations / Other
| | |
107
| | | |
(2,099
|
)
| | |
(1,992
|
)
| | |
(848
|
)
| | |
| | | | | | | | | |
|
TOTAL IBM CONSOLIDATED
| |
$
|
22,236
| | |
$
|
0
| | |
$
|
22,236
| | |
$
|
3,183
| | |
14.3
|
%
|
|
|
* Reclassified to reflect discontinued operations presentation.
|
**Reclassified to conform with 2015 presentation.
|
NM – Not Meaningful
|
|
|
INTERNATIONAL BUSINESS MACHINES CORPORATION
|
U.S. GAAP TO OPERATING RESULTS RECONCILIATION
|
(Unaudited; Dollars in millions except per share amounts)
|
|
|
|
FIRST-QUARTER 2015
|
| |
CONTINUING OPERATIONS
|
| | |
|
Acquisition-
|
|
Retirement-
|
| |
| | | |
Related
| |
Related
| |
Operating
|
| |
GAAP
| |
Adjustments*
| |
Adjustments**
| |
(Non-GAAP)
|
Gross Profit
| |
$
|
9,452
| | |
$
|
91
| | |
$
|
121
| | |
$
|
9,664
| |
| | | | | | | |
|
Gross Profit Margin
| | |
48.2
|
%
| |
0.5Pts
| |
0.6Pts
| | |
49.3
|
%
|
| | | | | | | |
|
S,G&A
| | |
5,362
| | | |
(79
|
)
| | |
(308
|
)
| | |
4,975
| |
| | | | | | | |
|
R,D&E
| | |
1,298
| | | |
-
| | | |
(13
|
)
| | |
1,285
| |
| | | | | | | |
|
Other (Income) & Expense
| | |
(143
|
)
| | |
0
| | | |
-
| | | |
(143
|
)
|
|
Total Expense & Other (Income)
| | |
6,451
| | | |
(79
|
)
| | |
(321
|
)
| | |
6,051
| |
| | | | | | | |
|
Pre-tax Income from
| | | | | | | | |
Continuing Operations
| | |
3,001
| | | |
170
| | | |
442
| | | |
3,612
| |
| | | | | | | |
|
Pre-tax Income Margin from
| | | | | | | | |
Continuing Operations
| | |
15.3
|
%
| |
0.9Pts
| |
2.3Pts
| | |
18.4
|
%
|
| | | | | | | |
|
Provision for Income Taxes***
| | |
585
| | | |
28
| | | |
109
| | | |
722
| |
| | | | | | | |
|
Effective Tax Rate
| | |
19.5
|
%
| |
-0.2Pts
| |
0.7Pts
| | |
20.0
|
%
|
| | | | | | | |
|
Income from Continuing Operations
| | |
2,415
| | | |
142
| | | |
333
| | | |
2,890
| |
|
Income Margin from
| | | | | | | | |
Continuing Operations
| | |
12.3
|
%
| |
0.7Pts
| |
1.7Pts
| | |
14.8
|
%
|
|
Diluted Earnings Per Share:
| | | | | | | | |
Continuing Operations
| |
$
|
2.44
| | |
$
|
0.14
| | |
$
|
0.33
| | |
$
|
2.91
| |
| | | | | | | |
|
|
| |
FIRST-QUARTER 2014****
|
| |
CONTINUING OPERATIONS
|
| | | |
Acquisition-
| |
Retirement-
| | |
| | | |
Related
| |
Related
| |
Operating
|
| |
GAAP
| |
Adjustments*
| |
Adjustments**
| |
(Non-GAAP)
|
Gross Profit
| |
$
|
10,627
| | |
$
|
104
| | |
$
|
52
| | |
$
|
10,783
| |
| | | | | | | |
|
Gross Profit Margin
| | |
47.8
|
%
| |
0.5Pts
| |
0.2Pts
| | |
48.5
|
%
|
| | | | | | | |
|
S,G&A
| | |
6,272
| | | |
(97
|
)
| | |
(87
|
)
| | |
6,087
| |
| | | | | | | |
|
R,D&E
| | |
1,402
| | | |
-
| | | |
17
| | | |
1,419
| |
| | | | | | | |
|
Other (Income) & Expense
| | |
(127
|
)
| | |
0
| | | |
-
| | | |
(128
|
)
|
|
Total Expense & Other (Income)
| | |
7,444
| | | |
(98
|
)
| | |
(70
|
)
| | |
7,276
| |
| | | | | | | |
|
Pre-tax Income from
| | | | | | | | |
Continuing Operations
| | |
3,183
| | | |
201
| | | |
123
| | | |
3,507
| |
| | | | | | | |
|
Pre-tax Income Margin from
| | | | | | | | |
Continuing Operations
| | |
14.3
|
%
| |
0.9Pts
| |
0.6Pts
| | |
15.8
|
%
|
| | | | | | | |
|
Provision for Income Taxes***
| | |
653
| | | |
40
| | | |
25
| | | |
717
| |
| | | | | | | |
|
Effective Tax Rate
| | |
20.5
|
%
| |
0.0Pts
| |
0.0Pts
| | |
20.5
|
%
|
| | | | | | | |
|
Income from Continuing Operations
| | |
2,530
| | | |
161
| | | |
98
| | | |
2,790
| |
| | | | | | | |
|
Income Margin from
| | | | | | | | |
Continuing Operations
| | |
11.4
|
%
| |
0.7Pts
| |
0.4Pts
| | |
12.5
|
%
|
|
Diluted Earnings Per Share:
| | | | | | | | |
Continuing Operations
| |
$
|
2.43
| | |
$
|
0.16
| | |
$
|
0.09
| | |
$
|
2.68
| |
* Includes amortization of acquired intangible assets and other
acquisition-related charges.
** Includes retirement-related items
driven by changes to plan assets and liabilities primarily related to
market performance.
*** Tax impact on operating (non-GAAP) pre-tax
income from continuing operations is calculated under the same
accounting principles applied to the GAAP pre-tax income which employs
an annual effective tax rate method to the results.
****
Reclassified to reflect discontinued operations presentation.
Contacts:
IBM
Ian Colley, 914-434-3043
colley@us.ibm.com
or
John
Bukovinsky, 732-618-3531
jbuko@us.ibm.com
Source: IBM
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