Company Website:
http://www.ibm.com
ARMONK, N.Y. -- (Business Wire)
IBM (NYSE:IBM)
Fourth-Quarter 2014:
- Diluted EPS from continuing operations:
- GAAP: $5.54, down 4 percent;
- Operating (non-GAAP): $5.81, down 6 percent;
- Pre-tax income from continuing operations:
- GAAP: $7.1 billion, flat year-to-year;
- Operating (non-GAAP): $7.4 billion, down 2 percent;
- Net income from continuing operations:
- GAAP: $5.5 billion, down 11 percent;
- Operating (non-GAAP): $5.8 billion, down 13 percent;
- Gross profit margin from continuing operations:
- GAAP: 53.3 percent, up 100 basis points;
- Operating (non-GAAP): 53.9 percent, up 60 basis points;
- Revenue from continuing operations: $24.1 billion:
- Down 12 percent; down 2 percent adjusting for divested
businesses and currency.
Full-Year 2014:
- Diluted EPS from continuing operations:
- GAAP: $15.59, up 2 percent;
- Operating (non-GAAP): $16.53, down 1 percent;
- Pre-tax income from continuing operations:
- GAAP: $20.0 billion, down 1 percent;
- Operating (non-GAAP): $21.1 billion, down 4 percent;
- Net income from continuing operations:
- GAAP: $15.8 billion, down 7 percent;
- Operating (non-GAAP): $16.7 billion, down 9 percent;
- Gross profit margin from continuing operations:
- GAAP: 50.0 percent, up 50 basis points;
- Operating (non-GAAP): 50.6 percent, up 10 basis points;
- Revenue from continuing operations: $92.8 billion:
- Down 6 percent; down 1 percent adjusting for divested
businesses and currency;
- Strategic imperatives grew 16 percent to $25 billion, and now
represent 27 percent of total IBM revenue:
- Total Cloud revenue of $7 billion, up 60 percent;
- Cloud delivered as a service revenues of $3 billion, up
approximately 75 percent;
- Year-end annual run rate of $3.5 billion for cloud
delivered as a service;
- Business analytics revenue up 7 percent to nearly $17 billion;
- Mobile revenue more than tripled;
- Security revenue up 19 percent.
IBM (NYSE:IBM) today announced fourth-quarter 2014 diluted earnings from
continuing operations of $5.54 per share, compared with diluted earnings
of $5.76 per share in the fourth-quarter of 2013, a decrease of 4
percent. Operating (non-GAAP) diluted earnings from continuing
operations were $5.81 per share compared with operating diluted earnings
of $6.16 per share in the fourth-quarter of 2013, a decrease of 6
percent.
Fourth-quarter net income from continuing operations was $5.5 billion
compared with $6.2 billion in the fourth-quarter of 2013, a decrease of
11 percent. Operating (non-GAAP) net income from continuing operations
was $5.8 billion, as compared with $6.6 billion in the fourth-quarter of
2013, a decrease of 13 percent.
For the fourth-quarter of 2014, IBM reported consolidated net income of
$5.5 billion or $5.51 of diluted earnings per share, including operating
net losses in discontinued operations related to the microelectronics
manufacturing business.
Total revenues from continuing operations for the fourth-quarter of 2014
of $24.1 billion were down 12 percent (down 2 percent, adjusting for the
impact of the divested customer care outsourcing and System x businesses
and for currency) from the fourth-quarter of 2013 and were down 1
percent for the full year 2014, adjusting for the impact of the divested
businesses and for currency.
“We are making significant progress in our transformation, continuing to
shift IBM’s business to higher value, and investing and positioning
ourselves for the longer term," said Ginni Rometty, IBM chairman,
president and chief executive officer.
"In 2014, we repositioned our hardware portfolio for higher value,
maintained a services backlog of $128 billion and achieved strong
revenue growth across cloud, analytics, mobile, social and security.
Together these strategic imperatives grew 16 percent in 2014 and now
represent $25 billion and 27 percent of our revenue.”
Fourth-Quarter GAAP – Operating (non-GAAP) Reconciliation
Fourth-quarter operating (non-GAAP) diluted earnings from continuing
operations exclude $0.27 per share of charges; $0.19 per share for the
amortization of purchased intangible assets and other
acquisition-related charges; and $0.08 per share for retirement-related
charges driven by changes to plan assets and liabilities primarily
related to market performance.
Full-Year 2015 Expectations
The company will provide 2015 earnings expectations during today’s
quarterly earnings conference call.
Geographic Regions
The Americas’ fourth-quarter revenues were $11.1 billion, a decrease of
9 percent (down 4 percent, adjusting for divested businesses and
currency) from the 2013 period. Revenues from Europe/Middle East/Africa
were down 13 percent to $8.0 billion (down 1 percent, adjusting for
divested businesses and currency). Asia-Pacific revenues decreased 17
percent (down 2 percent, adjusting for divested businesses and currency)
to $4.9 billion.
Growth Markets and Major Markets
Revenues from the company’s growth markets were down 16 percent (down 2
percent, adjusting for divested businesses and currency). Revenues in
the BRIC countries — Brazil, Russia, India and China — were down 21
percent (down 8 percent, adjusting for divested businesses and
currency). China revenues were down 1 percent, adjusting for divested
businesses and currency. Revenues from the company’s major markets were
down 11 percent (down 2 percent, adjusting for divested businesses and
currency).
Services
Global Services segment revenues decreased 8 percent (flat adjusting for
the impact of the divested customer care outsourcing and System x
businesses and for currency) to $13.5 billion. Global Technology
Services segment revenues decreased 8 percent (up 2 percent adjusting
for the impact of the divested customer care outsourcing and System x
businesses and for currency) to $9.2 billion. Global Business Services
segment revenues were down 8 percent (down 3 percent, adjusting for
currency) to $4.3 billion.
Pre-tax income from Global Technology Services decreased 26 percent and
pre-tax margin decreased to 15.6 percent. Global Business Services
pre-tax income decreased 22 percent and pre-tax margin decreased to 16.4
percent. Pre-tax income and margin include the impact of the
fourth-quarter workforce rebalancing charge.
The estimated services backlog at December 31, 2014 was $128 billion,
flat year to year adjusting for the divested customer care outsourcing
and System x businesses and currency.
Software
Revenues from the Software segment were $7.6 billion, down 7 percent
(down 3 percent, adjusting for currency) compared with the
fourth-quarter of 2013. Software pre-tax income decreased 11 percent and
pre-tax margin decreased to 44.7 percent. Pre-tax income and margin
include the impact of the fourth-quarter workforce rebalancing charge.
Revenues from IBM’s key middleware products, which include WebSphere,
Information Management, Tivoli, Workforce Solutions and Rational
products, were $5.4 billion, down 6 percent (down 3 percent, adjusting
for currency) versus the fourth-quarter of 2013. Operating systems
revenues of $557 million were down 19 percent (down 16 percent,
adjusting for currency) compared with the prior-year quarter.
Financing
Global Financing segment revenues were flat (up 5 percent, adjusting for
currency) in the fourth-quarter to $532 million. Pre-tax income for the
segment decreased 11 percent to $526 million.
Hardware
Revenues from continuing operations for the Systems and Technology
segment totaled $2.4 billion for the quarter, down 39 percent (down 12
percent, adjusting for the impact of the divested System x business and
currency) from the fourth-quarter of 2013. Systems and Technology
pre-tax income increased 12 percent and pre-tax margin increased to 15.5
percent. Pre-tax income and margin include the impact of the
fourth-quarter workforce rebalancing charge.
Revenues from Power Systems were down 13 percent (down 11 percent,
adjusting for currency) compared with the 2013 period. Revenues from
System z mainframe server products decreased 26 percent (down 23
percent, adjusting for currency). Revenues from System Storage decreased
8 percent (down 5 percent, adjusting for currency).
Gross Profit
The company’s total gross profit margin from continuing operations was
53.3 percent in the 2014 fourth-quarter period compared with 52.4
percent in the 2013 fourth-quarter period. Total operating (non-GAAP)
gross profit margin from continuing operations was 53.9 percent in the
2014 fourth-quarter compared with 53.3 percent in the 2013
fourth-quarter period.
Expense
Total reported expense and other income from continuing operations
declined 20 percent to $5.8 billion compared with the prior year period.
The reported reduction was driven by the gain of $1.4 billion ($1.1
billion pre-tax income benefit, net of related transaction and
performance-based costs) from the divestiture of the System x business
and the elimination of the expense for the System x business from the
company’s run rate. Without these items, expense and other income would
have been up approximately 2 percent. S,G&A expense of $6.0 billion was
up 1 percent from the prior-year period and includes the workforce
rebalancing charge of approximately $580 million. R,D&E expense of $1.3
billion decreased 9 percent compared with the year-ago period,
reflecting the divestiture of the System x business and currency impact.
Intellectual property and custom development income decreased to $199
million compared with $201 million a year ago. Other (income) and
expense was income of $1.5 billion, including the gain from the divested
System x business, compared with prior-year income of $116 million.
Interest expense increased to $117 million compared with $113 million in
the prior-year period.
Total operating (non-GAAP) expense and other income from continuing
operations decreased 20 percent to $5.6 billion compared with the
prior-year period, including the gain from the divestiture of the System
x business. Operating (non-GAAP) S,G&A expense increased 1 percent to
$5.8 billion compared with the prior-year period and includes the
workforce rebalancing charge. Operating (non-GAAP) R,D&E expense of $1.3
billion was down 7 percent compared with the year-ago period, reflecting
the divestiture of the System x business and currency impact.
Pre-Tax Income
Pre-tax income from continuing operations was flat year over year at
$7.1 billion; pre-tax margin of 29.4 percent was up 3.5 points compared
with the prior-year period. Operating (non-GAAP) pre-tax income from
continuing operations decreased 2 percent to $7.4 billion and pre-tax
margin was 30.7 percent, up 3.0 points, compared to the year-ago period.
***
IBM’s tax rate from continuing operations was 22.3 percent, up 9.8
points year over year; operating (non-GAAP) tax rate was 21.8 percent,
up 9.6 points compared to the year-ago period. The change in the
fourth-quarter tax rate is driven by prior year discrete tax items,
including benefits from tax audit settlements.
Net income margin from continuing operations increased 0.2 points to
22.9 percent. Total operating (non-GAAP) net income margin from
continuing operations decreased 0.3 points to 24.0 percent.
The weighted-average number of diluted common shares outstanding in the
fourth-quarter 2014 was 995 million, a decrease of 8 percent compared
with the same period of 2013. As of December 31, 2014, there were 991
million basic common shares outstanding.
Debt, including Global Financing, totaled $40.8 billion, compared with
$39.7 billion at year-end 2013, and down $4.9 billion from the third
quarter of 2014. From a management segment view, Global Financing debt
totaled $29.1 billion versus $27.5 billion at year-end 2013, resulting
in a debt-to-equity ratio of 7.2 to 1. Core (non-global financing) debt
totaled $11.7 billion, a decrease of $0.5 billion since year-end 2013,
resulting in a debt-to-capitalization ratio of 59 percent, which
includes impacts from retirement plan remeasurement that take into
account changes in discount rates and recently released U.S. mortality
tables, the announced Microelectronics business divestiture and foreign
exchange translation.
IBM ended the fourth-quarter 2014 with $8.5 billion of cash on hand and
generated free cash flow of $6.6 billion, excluding Global Financing
receivables, down approximately $1.8 billion year over year. In the
fourth quarter of 2014, the company returned $1.2 billion to
shareholders through $1.1 billion in dividends and $0.1 billion of gross
share repurchases.
At the end of December 2014, IBM had approximately $6.3 billion
remaining from the current share repurchase authorization.
Full-Year 2014 Results
Net income from continuing operations for the twelve months ended
December 31, 2014 was $15.8 billion compared with $16.9 billion in the
year-ago period, a decrease of 7 percent. Diluted earnings per share
from continuing operations were $15.59, up 2 percent compared to the
2013 period.
The consolidated diluted earnings per share were $11.90 as compared to
$14.94 per share in 2013, down 20 percent. Revenues from continuing
operations for the twelve-month period totaled $92.8 billion, a decrease
of 6 percent (down 1 percent, adjusting for divested businesses and
currency) compared with $98.4 billion for the twelve months of 2013.
Full year results include a non-recurring pre-tax charge of $4.7
billion, or $3.4 billion, net of tax. The charge includes an impairment
to reflect fair value less estimated costs to sell the Microelectronics
manufacturing business assets, which the company has classified as held
for sale at December 31, 2014. The charge also includes other estimated
costs related to the transaction, including cash consideration expected
to be transferred to GLOBALFOUNDRIES of approximately $1.5 billion.
Operating (non-GAAP) net income from continuing operations for the
twelve months ended December 31, 2014 was $16.7 billion compared with
$18.4 billion in the year-ago period, a decrease of 9 percent. Operating
(non-GAAP) diluted earnings per share from continuing operations were
$16.53 compared with $16.64 per diluted share for the 2013 period, a
decrease of less than 1 percent.
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;
-
presenting non-global financing debt-to-capitalization ratio;
-
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 fourth-quarter
earnings materials. These materials are available 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. EST, today. The Webcast may be accessed via a link at http://www.ibm.com/investor/events/earnings/4q14.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
|
|
Twelve Months Ended
|
| |
December 31,
| |
December 31,
|
| | |
| |
|
Percent
| | |
| |
|
Percent
|
| |
2014
| |
2013*
| |
Change
| |
2014
| |
2013*
| |
Change
|
REVENUE
| | | | | | | | | | | | |
| | | | | | | | | | | |
|
Global Technology Services
| |
$
|
9,167
| | |
$
|
9,917
| | |
-7.6
|
%
| |
$
|
37,130
| | |
$
|
38,551
| | |
-3.7
|
%
|
Gross profit margin
| | |
38.5
|
%
| | |
38.8
|
%
| | | | |
38.3
|
%
| | |
38.1
|
%
| | |
| | | | | | | | | | | |
|
Global Business Services
| | |
4,349
| | | |
4,747
| | |
-8.4
|
%
| | |
17,825
| | | |
18,396
| | |
-3.1
|
%
|
Gross profit margin
| | |
32.0
|
%
| | |
30.7
|
%
| | | | |
30.8
|
%
| | |
30.9
|
%
| | |
| | | | | | | | | | | |
|
Software
| | |
7,578
| | | |
8,140
| | |
-6.9
|
%
| | |
25,434
| | | |
25,932
| | |
-1.9
|
%
|
Gross profit margin
| | |
90.0
|
%
| | |
90.5
|
%
| | | | |
88.6
|
%
| | |
88.8
|
%
| | |
|
Systems and Technology
| | |
2,406
| | | |
3,947
| | |
-39.0
|
%
| | |
9,996
| | | |
12,988
| | |
-23.0
|
%
|
Gross profit margin
| | |
49.6
|
%
| | |
42.2
|
%
| | | | |
39.5
|
%
| | |
40.8
|
%
| | |
|
Global Financing
| | |
532
| | | |
534
| | |
-0.5
|
%
| | |
2,034
| | | |
2,022
| | |
0.6
|
%
|
Gross profit margin
| | |
48.7
|
%
| | |
43.3
|
%
| | | | |
49.4
|
%
| | |
45.6
|
%
| | |
| | | | | | | | | | | |
|
Other
| | |
82
| | | |
100
| | |
-17.7
|
%
| | |
374
| | | |
478
| | |
-21.7
|
%
|
Gross profit margin
| | |
-401.7
|
%
| | |
-234.8
|
%
| | | | |
-215.0
|
%
| | |
-195.6
|
%
| | |
| | | | | | | | | | | |
|
TOTAL REVENUE
| | |
24,113
| | | |
27,385
| | |
-11.9
|
%
| | |
92,793
| | | |
98,367
| | |
-5.7
|
%
|
| | | | | | | | | | | |
|
GROSS PROFIT
| | |
12,862
| | | |
14,337
| | |
-10.3
|
%
| | |
46,407
| | | |
48,684
| | |
-4.7
|
%
|
Gross profit margin
| | |
53.3
|
%
| | |
52.4
|
%
| | | | |
50.0
|
%
| | |
49.5
|
%
| | |
|
EXPENSE AND OTHER INCOME
| | | | | | | | | | | | |
| | | | | | | | | | | |
|
S,G&A
| | |
6,034
| | | |
5,987
| | |
0.8
|
%
| | |
23,180
| | | |
23,451
| | |
-1.2
|
%
|
Expense to revenue
| | |
25.0
|
%
| | |
21.9
|
%
| | | | |
25.0
|
%
| | |
23.8
|
%
| | |
|
R,D&E
| | |
1,320
| | | |
1,452
| | |
-9.1
|
%
| | |
5,437
| | | |
5,743
| | |
-5.3
|
%
|
Expense to revenue
| | |
5.5
|
%
| | |
5.3
|
%
| | | | |
5.9
|
%
| | |
5.8
|
%
| | |
|
Intellectual property and¬¬
| | | | | | | | | | | | |
custom development income
| | |
(199
|
)
| | |
(201
|
)
| |
-1.2
|
%
| | |
(742
|
)
| | |
(822
|
)
| |
-9.8
|
%
|
| | | | | | | | | | | |
|
Other (income) and expense
| | |
(1,506
|
)
| | |
(116
|
)
| |
NM
| | | |
(1,938
|
)
| | |
(333
|
)
| |
NM
| |
|
Interest expense
| | |
117
| | | |
113
| | |
3.6
|
%
| | |
484
| | | |
402
| | |
20.4
|
%
|
| | | | | | | | | | | |
|
TOTAL EXPENSE AND
| | | | | | | | | | | | |
OTHER INCOME
| | |
5,767
| | | |
7,235
| | |
-20.3
|
%
| | |
26,421
| | | |
28,440
| | |
-7.1
|
%
|
Expense to revenue
| | |
23.9
|
%
| | |
26.4
|
%
| | | | |
28.5
|
%
| | |
28.9
|
%
| | |
|
INCOME FROM CONTINUING
| | | | | | | | | | | | |
OPERATIONS BEFORE INCOME TAXES
| | |
7,094
| | | |
7,102
| | |
-0.1
|
%
| | |
19,986
| | | |
20,244
| | |
-1.3
|
%
|
Pre-tax margin
| | |
29.4
|
%
| | |
25.9
|
%
| | | | |
21.5
|
%
| | |
20.6
|
%
| | |
|
Provision for income taxes
| | |
1,580
| | | |
885
| | |
78.4
|
%
| | |
4,234
| | | |
3,363
| | |
25.9
|
%
|
Effective tax rate
| | |
22.3
|
%
| | |
12.5
|
%
| | | | |
21.2
|
%
| | |
16.6
|
%
| | |
|
INCOME FROM CONTINUING
| | | | | | | | | | | | |
OPERATIONS
| |
$
|
5,515
| | |
$
|
6,216
| | |
-11.3
|
%
| |
$
|
15,751
| | |
$
|
16,881
| | |
-6.7
|
%
|
Net margin
| | |
22.9
|
%
| | |
22.7
|
%
| | | | |
17.0
|
%
| | |
17.2
|
%
| | |
|
DISCONTINUED OPERATIONS
| | | | | | | | | | | | |
Loss from discontinued
| | | | | | | | | | | | |
operations, net of taxes
| | |
(31
|
)
| | |
(32
|
)
| | | | |
(3,729
|
)
| | |
(398
|
)
| | |
|
NET INCOME
| |
$
|
5,484
|
| |
$
|
6,185
|
| |
-11.3
|
%
| |
$
|
12,022
|
| |
$
|
16,483
|
| |
-27.1
|
%
|
| | | | | | | | | | | |
|
EARNINGS PER SHARE
| | | | | | | | | | | | |
OF COMMON STOCK:
| | | | | | | | | | | | |
ASSUMING DILUTION
| | | | | | | | | | | | |
CONTINUING OPERATIONS
| |
$
|
5.54
| | |
$
|
5.76
| | |
-3.8
|
%
| |
$
|
15.59
| | |
$
|
15.30
| | |
1.9
|
%
|
DISCONTINUED OPERATIONS
| |
|
($0.03
|
)
| |
|
($0.03
|
)
| | | |
|
($3.69
|
)
| |
|
($0.36
|
)
| | |
TOTAL
| |
$
|
5.51
|
| |
$
|
5.73
|
| |
-3.8
|
%
| |
$
|
11.90
|
| |
$
|
14.94
|
| |
-20.3
|
%
|
| | | | | | | | | | | |
|
BASIC
| | | | | | | | | | | | |
CONTINUING OPERATIONS
| |
$
|
5.57
| | |
$
|
5.80
| | |
-4.0
|
%
| |
$
|
15.68
| | |
$
|
15.42
| | |
1.7
|
%
|
DISCONTINUED OPERATIONS
| |
|
($0.03
|
)
| |
|
($0.03
|
)
| | | |
|
($3.71
|
)
| |
|
($0.36
|
)
| | |
TOTAL
| |
$
|
5.54
|
| |
$
|
5.77
|
| |
-4.0
|
%
| |
$
|
11.97
|
| |
$
|
15.06
|
| |
-20.5
|
%
|
| | | | | | | | | | | |
|
WEIGHTED-AVERAGE NUMBER
| | | | | | | | | | | | |
OF COMMON SHARES OUT-
| | | | | | | | | | | | |
STANDING (M's):
| | | | | | | | | | | | |
ASSUMING DILUTION
| | |
995.4
| | | |
1,080.0
| | | | | |
1,010.0
| | | |
1,103.0
| | | |
BASIC
| | |
990.4
| | | |
1,072.5
| | | | | |
1,004.3
| | | |
1,094.5
| | | |
|
* Reclassified to reflect discontinued operations presentation.
|
NM = Not Meaningful
|
|
INTERNATIONAL BUSINESS MACHINES CORPORATION
|
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
|
(Unaudited)
|
|
|
|
At
|
|
At
|
(Dollars in Millions)
| |
December 31,
| |
December 31,
|
| |
2014
| |
2013
|
ASSETS:
| | | | |
| | | |
|
Current Assets:
| | | | |
Cash and cash equivalents
| |
$
|
8,476
| | |
$
|
10,716
| |
Marketable securities
| | |
0
| | | |
350
| |
Notes and accounts receivable - trade
| | | | |
(net of allowances of $336 in 2014 and $291 in 2013)
| | |
9,090
| | | |
10,465
| |
Short-term financing receivables
| | | | |
(net of allowances of $452 in 2014 and $308 in 2013)
| | |
19,835
| | | |
19,787
| |
Other accounts receivable
| | | | |
(net of allowances of $40 in 2014 and $36 in 2013)
| | |
2,906
| | | |
1,584
| |
Inventories, at lower of average cost or market:
| | | | |
Finished goods
| | |
430
| | | |
444
| |
Work in process and raw materials
| |
|
1,674
|
| |
|
1,866
|
|
Total inventories
| | |
2,103
| | | |
2,310
| |
Deferred taxes
| | |
2,044
| | | |
1,651
| |
Prepaid expenses and other current assets
| |
|
4,967
|
| |
|
4,488
|
|
Total Current Assets
| | |
49,422
| | | |
51,350
| |
| | | |
|
Property, plant and equipment
| | |
39,034
| | | |
40,475
| |
Less: Accumulated depreciation
| |
|
28,263
|
| |
|
26,654
|
|
Property, plant and equipment - net
| | |
10,771
| | | |
13,821
| |
Long-term financing receivables
| | | | |
(net of allowances of $126 in 2014 and $80 in 2013)
| | |
11,109
| | | |
12,755
| |
Prepaid pension assets
| | |
2,160
| | | |
5,551
| |
Deferred taxes
| | |
4,808
| | | |
3,051
| |
Goodwill
| | |
30,556
| | | |
31,184
| |
Intangible assets - net
| | |
3,104
| | | |
3,871
| |
Investments and sundry assets
| |
|
5,603
|
| |
|
4,639
|
|
Total Assets
| |
$
|
117,532
|
| |
$
|
126,223
|
|
|
LIABILITIES:
| | | | |
| | | |
|
Current Liabilities:
| | | | |
Taxes
| |
$
|
5,084
| | |
$
|
4,633
| |
Short-term debt
| | |
5,731
| | | |
6,862
| |
Accounts payable
| | |
6,864
| | | |
7,461
| |
Compensation and benefits
| | |
4,031
| | | |
3,893
| |
Deferred income
| | |
11,877
| | | |
12,557
| |
Other accrued expenses and liabilities
| |
|
6,013
|
| |
|
4,748
|
|
Total Current Liabilities
| | |
39,600
| | | |
40,154
| |
| | | |
|
Long-term debt
| | |
35,073
| | | |
32,856
| |
Retirement and nonpension postretirement
| | | | |
benefit obligations
| | |
18,261
| | | |
16,242
| |
Deferred income
| | |
3,691
| | | |
4,108
| |
Other liabilities
| |
|
8,892
|
| |
|
9,934
|
|
Total Liabilities
| | |
105,518
| | | |
103,294
| |
|
EQUITY:
| | | | |
|
IBM Stockholders' Equity:
| | | | |
Common stock
| | |
52,666
| | | |
51,594
| |
Retained earnings
| | |
137,793
| | | |
130,042
| |
Treasury stock -- at cost
| | |
(150,715
|
)
| | |
(137,242
|
)
|
Accumulated other comprehensive income/(loss)
| |
|
(27,875
|
)
| |
|
(21,602
|
)
|
Total IBM stockholders' equity
| | |
11,868
| | | |
22,792
| |
| | | |
|
Noncontrolling interests
| |
|
146
|
| |
|
137
|
|
Total Equity
| |
|
12,014
|
| |
|
22,929
|
|
Total Liabilities and Equity
| |
$
|
117,532
|
| |
$
|
126,223
|
|
|
INTERNATIONAL BUSINESS MACHINES CORPORATION
|
CASH FLOW ANALYSIS
|
(Unaudited)
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
(Dollars in Millions)
| |
December 31,
| |
December 31,
|
| |
2014
|
|
2013
| |
2014
|
|
2013
|
Net Cash from Operating Activities per GAAP:
| |
$
|
6,059
| | |
$
|
6,528
| | |
$
|
16,868
| | |
$
|
17,485
| |
| | | | | | | |
|
Less: the change in Global Financing (GF)
| | | | | | | | |
Receivables
| |
|
(1,505
|
)
| |
|
(2,932
|
)
| |
|
718
|
| |
|
(1,304
|
)
|
Net Cash from Operating Activities
| | | | | | | | |
(Excluding GF Receivables)
| | |
7,564
| | | |
9,460
| | | |
16,151
| | | |
18,789
| |
| | | | | | | |
|
Capital Expenditures, Net
| | |
(976
|
)
| | |
(1,059
|
)
| | |
(3,779
|
)
| | |
(3,768
|
)
|
| | | | | | | |
|
Free Cash Flow
| | | | | | | | |
(Excluding GF Receivables)
| | |
6,588
| | | |
8,401
| | | |
12,372
| | | |
15,021
| |
| | | | | | | |
|
Acquisitions
| | |
(6
|
)
| | |
(495
|
)
| | |
(656
|
)
| | |
(3,056
|
)
|
Divestitures
| | |
1,869
| | | |
50
| | | |
2,357
| | | |
297
| |
Dividends
| | |
(1,089
|
)
| | |
(1,025
|
)
| | |
(4,265
|
)
| | |
(4,058
|
)
|
Share Repurchase
| | |
(132
|
)
| | |
(5,797
|
)
| | |
(13,679
|
)
| | |
(13,859
|
)
|
Non-GF Debt
| | |
(5,883
|
)
| | |
1,637
| | | |
(1,348
|
)
| | |
3,193
| |
Other (includes GF Receivables, and
| | | | | | | | |
GF Debt)
| | |
(2,435
|
)
| | |
(1,937
|
)
| | |
2,629
| | | |
2,400
| |
| | | | | | | |
|
Change in Cash, Cash Equivalents and
| | | | | | | | |
Short-term Marketable Securities
| |
|
($1,088
|
)
| |
$
|
834
|
| |
|
($2,589
|
)
| |
|
($63
|
)
|
|
INTERNATIONAL BUSINESS MACHINES CORPORATION
|
SEGMENT DATA
|
(Unaudited)
|
|
|
|
FOURTH-QUARTER 2014
|
| | |
| |
| |
|
Pre-tax
|
| |
| | | | | | | |
Income/
| | |
| | | | | | | |
(Loss)
| | |
(Dollars in Millions)
| |
Revenue
| |
Continuing
| |
Pre-tax
|
| |
External
| |
Internal
| |
Total
| |
Operations
| |
Margin
|
SEGMENT
| | | | | | | | | | |
| | | | | | | | | |
|
Global Technology Services
| |
$
|
9,167
| | |
$
|
195
| | |
$
|
9,362
| | |
$
|
1,464
| | |
15.6
|
%
|
Y-T-Y change
| | |
-7.6
|
%
| | |
-25.7
|
%
| | |
-8.0
|
%
| | |
-26.4
|
%
| | |
| | | | | | | | | |
|
Global Business Services
| | |
4,349
| | | |
127
| | | |
4,476
| | | |
733
| | |
16.4
|
%
|
Y-T-Y change
| | |
-8.4
|
%
| | |
-24.9
|
%
| | |
-8.9
|
%
| | |
-22.0
|
%
| | |
| | | | | | | | | |
|
Software
| | |
7,578
| | | |
845
| | | |
8,422
| | | |
3,765
| | |
44.7
|
%
|
Y-T-Y change
| | |
-6.9
|
%
| | |
-3.8
|
%
| | |
-6.6
|
%
| | |
-11.2
|
%
| | |
| | | | | | | | | |
|
Systems and Technology
| | |
2,406
| | | |
107
| | | |
2,512
| | | |
388
| | |
15.5
|
%
|
Y-T-Y change
| | |
-39.0
|
%
| | |
-37.4
|
%
| | |
-39.0
|
%
| | |
12.2
|
%
| | |
| | | | | | | | | |
|
Global Financing
| | |
532
| | | |
588
| | | |
1,119
| | | |
526
| | |
47.0
|
%
|
Y-T-Y change
| | |
-0.5
|
%
| | |
-10.1
|
%
| | |
-5.8
|
%
| | |
-10.8
|
%
| | |
| | | | | | | | | |
|
TOTAL REPORTABLE SEGMENTS
| |
$
|
24,031
| | |
$
|
1,860
| | |
$
|
25,891
| | |
$
|
6,876
| | |
26.6
|
%
|
Y-T-Y change
| | |
-11.9
|
%
| | |
-12.8
|
%
| | |
-12.0
|
%
| | |
-15.2
|
%
| | |
| | | | | | | | | |
|
Eliminations / Other
| | |
82
| | | |
(1,860
|
)
| | |
(1,778
|
)
| | |
219
| | | |
| | | | | | | | | |
|
TOTAL IBM CONSOLIDATED
| |
$
|
24,113
| | |
$
|
0
| | |
$
|
24,113
| | |
$
|
7,094
| | |
29.4
|
%
|
Y-T-Y change
| | |
-11.9
|
%
| | | | |
-11.9
|
%
| | |
-0.1
|
%
| | |
|
|
| |
FOURTH-QUARTER 2013*
|
| | | | | | | |
Pre-tax
| | |
| | | | | | | |
Income/
| | |
| | | | | | | |
(Loss)
| | |
(Dollars in Millions)
| |
Revenue
| |
Continuing
| |
Pre-tax
|
| |
External
| |
Internal
| |
Total
| |
Operations
| |
Margin
|
SEGMENTS
| | | | | | | | | | |
|
Global Technology Services
| |
$
|
9,917
| | |
$
|
262
| | |
$
|
10,179
| | |
$
|
1,989
| | |
19.5
|
%
|
| | | | | | | | | |
|
Global Business Services
| | |
4,747
| | | |
169
| | | |
4,915
| | | |
940
| | |
19.1
|
%
|
| | | | | | | | | |
|
Software
| | |
8,140
| | | |
878
| | | |
9,018
| | | |
4,239
| | |
47.0
|
%
|
| | | | | | | | | |
|
Systems and Technology*
| | |
3,947
| | | |
170
| | | |
4,117
| | | |
346
| | |
8.4
|
%
|
| | | | | | | | | |
|
Global Financing
| | |
534
| | | |
654
| | | |
1,188
| | | |
589
| | |
49.6
|
%
|
| | | | | | | | | |
|
TOTAL REPORTABLE SEGMENTS
| |
$
|
27,285
| | |
$
|
2,133
| | |
$
|
29,418
| | |
$
|
8,104
| | |
27.5
|
%
|
| | | | | | | | | |
|
Eliminations / Other
| | |
100
| | | |
(2,133
|
)
| | |
(2,033
|
)
| | |
(1,002
|
)
| | |
| | | | | | | | | |
|
TOTAL IBM CONSOLIDATED
| |
$
|
27,385
| | |
$
|
0
| | |
$
|
27,385
| | |
$
|
7,102
| | |
25.9
|
%
|
|
* Reclassified to reflect discontinued operations presentation.
|
|
INTERNATIONAL BUSINESS MACHINES CORPORATION
|
SEGMENT DATA
|
(Unaudited)
|
|
| |
| |
| |
| |
| |
| |
TWELVE-MONTHS 2014
|
| | | | | | | |
Pre-tax
| | |
| | | | | | | |
Income/
| | |
| | | | | | | |
(Loss)
| | |
(Dollars in Millions)
| |
Revenue
| |
Continuing
| |
Pre-tax
|
| |
External
| |
Internal
| |
Total
| |
Operations
| |
Margin
|
SEGMENTS
| | | | | | | | | | |
| | | | | | | | | |
|
Global Technology Services
| |
$
|
37,130
| | |
$
|
934
| | |
$
|
38,063
| | |
$
|
6,340
| | |
16.7
|
%
|
Y-T-Y change
| | |
-3.7
|
%
| | |
-12.2
|
%
| | |
-3.9
|
%
| | |
-9.2
|
%
| | |
|
Global Business Services
| | |
17,825
| | | |
543
| | | |
18,367
| | | |
2,999
| | |
16.3
|
%
|
Y-T-Y change
| | |
-3.1
|
%
| | |
-24.0
|
%
| | |
-3.9
|
%
| | |
-6.7
|
%
| | |
| | | | | | | | | |
|
Software
| | |
25,434
| | | |
3,496
| | | |
28,931
| | | |
10,699
| | |
37.0
|
%
|
Y-T-Y change
| | |
-1.9
|
%
| | |
9.6
|
%
| | |
-0.7
|
%
| | |
-3.7
|
%
| | |
| | | | | | | | | |
|
Systems and Technology
| | |
9,996
| | | |
647
| | | |
10,643
| | | |
34
| | |
0.3
|
%
|
Y-T-Y change
| | |
-23.0
|
%
| | |
9.2
|
%
| | |
-21.6
|
%
| | |
-84.1
|
%
| | |
| | | | | | | | | |
|
Global Financing
| | |
2,034
| | | |
2,488
| | | |
4,522
| | | |
2,189
| | |
48.4
|
%
|
Y-T-Y change
| | |
0.6
|
%
| | |
9.0
|
%
| | |
5.1
|
%
| | |
0.8
|
%
| | |
| | | | | | | | | |
|
TOTAL REPORTABLE SEGMENTS
| |
$
|
92,418
| | |
$
|
8,108
| | |
$
|
100,527
| | |
$
|
22,262
| | |
22.1
|
%
|
Y-T-Y change
| | |
-5.6
|
%
| | |
3.4
|
%
| | |
-4.9
|
%
| | |
-6.0
|
%
| | |
| | | | | | | | | |
|
Eliminations / Other
| | |
374
| | | |
(8,108
|
)
| | |
(7,734
|
)
| | |
(2,276
|
)
| | |
|
TOTAL IBM CONSOLIDATED
| |
$
|
92,793
| | |
$
|
0
| | |
$
|
92,793
| | |
$
|
19,986
| | |
21.5
|
%
|
Y-T-Y change
| | |
-5.7
|
%
| | | | |
-5.7
|
%
| | |
-1.3
|
%
| | |
|
|
| |
TWELVE-MONTHS 2013*
|
| | | | | | | |
Pre-tax
| | |
| | | | | | | |
Income
| | |
| | | | | | | |
(Loss)/
| | |
(Dollars in Millions)
| |
Revenue
| |
Continuing
| |
Pre-tax
|
| |
External
| |
Internal
| |
Total
| |
Operations
| |
Margin
|
SEGMENTS
| | | | | | | | | | |
| | | | | | | | | |
|
|
Global Technology Services
| |
$
|
38,551
| | |
$
|
1,063
| | |
$
|
39,615
| | |
$
|
6,983
| | |
17.6
|
%
|
|
Global Business Services
| | |
18,396
| | | |
714
| | | |
19,109
| | | |
3,214
| | |
16.8
|
%
|
| | | | | | | | | |
|
Software
| | |
25,932
| | | |
3,191
| | | |
29,123
| | | |
11,106
| | |
38.1
|
%
|
| | | | | | | | | |
|
Systems and Technology*
| | |
12,988
| | | |
593
| | | |
13,581
| | | |
213
| | |
1.6
|
%
|
| | | | | | | | | |
|
Global Financing
| | |
2,022
| | | |
2,282
| | | |
4,304
| | | |
2,171
| | |
50.4
|
%
|
| | | | | | | | | |
|
TOTAL REPORTABLE SEGMENTS
| |
$
|
97,889
| | |
$
|
7,843
| | |
$
|
105,732
| | |
$
|
23,687
| | |
22.4
|
%
|
| | | | | | | | | |
|
Eliminations / Other
| | |
478
| | | |
(7,843
|
)
| | |
(7,365
|
)
| | |
(3,443
|
)
| | |
|
TOTAL IBM CONSOLIDATED
| |
$
|
98,367
| | |
$
|
0
| | |
$
|
98,367
| | |
$
|
20,244
| | |
20.6
|
%
|
|
* Reclassified to reflect discontinued operations presentation.
|
|
INTERNATIONAL BUSINESS MACHINES CORPORATION
|
U.S. GAAP TO OPERATING RESULTS RECONCILIATION
|
(Unaudited; Dollars in millions except per share amounts)
|
|
|
|
FOURTH-QUARTER 2014
|
| |
CONTINUING OPERATIONS
|
| | |
|
Acquisition-
|
|
Retirement-
|
| |
| | | |
Related
| |
Related
| |
Operating
|
| |
GAAP
| |
Adjustments*
| |
Adjustments**
| |
(Non-GAAP)
|
Gross Profit
| |
$
|
12,862
| | |
$
|
101
| | |
$
|
33
| | |
$
|
12,996
| |
| | | | | | | |
|
Gross Profit Margin
| | |
53.3
|
%
| |
0.4Pts
| |
0.1Pts
| | |
53.9
|
%
|
| | | | | | | |
|
S,G&A
| | |
6,034
| | | |
(94
|
)
| | |
(95
|
)
| | |
5,845
| |
| | | | | | | |
|
R,D&E
| | |
1,320
| | | |
-
| | | |
21
| | | |
1,341
| |
| | | | | | | |
|
Other (Income) & Expense
| | |
(1,506
|
)
| | |
(1
|
)
| | |
-
| | | |
(1,506
|
)
|
|
Total Expense & Other (Income)
| | |
5,767
| | | |
(95
|
)
| | |
(74
|
)
| | |
5,598
| |
|
Pre-Tax Income from
| | | | | | | | |
Continuing Operations
| | |
7,094
| | | |
196
| | | |
107
| | | |
7,398
| |
|
Pre-Tax Income Margin from
| | | | | | | | |
Continuing Operations
| | |
29.4
|
%
| |
0.8Pts
| |
0.4Pts
| | |
30.7
|
%
|
| | | | | | | |
|
Provision for Income Taxes***
| | |
1,580
| | | |
10
| | | |
24
| | | |
1,613
| |
| | | | | | | |
|
Effective Tax Rate
| | |
22.3
|
%
| |
-0.5Pts
| |
0.0Pts
| | |
21.8
|
%
|
|
Income from Continuing Operations
| | |
5,515
| | | |
186
| | | |
84
| | | |
5,785
| |
|
Income Margin from
| | | | | | | | |
Continuing Operations
| | |
22.9
|
%
| |
0.8Pts
| |
0.3Pts
| | |
24.0
|
%
|
|
Loss from Discontinued Operations
| | | | | | | | |
Net of Taxes
| | |
(31
|
)
| | |
-
| | | |
-
| | | |
(31
|
)
|
| | | | | | | |
|
Net Income
| | |
5,484
| | | |
186
| | | |
84
| | | |
5,753
| |
| | | | | | | |
|
Diluted Earnings Per Share:
| | | | | | | | |
Continuing Operations
| |
$
|
5.54
| | |
$
|
0.19
| | |
$
|
0.08
| | |
$
|
5.81
| |
Discontinued Operations
| | |
($0.03
|
)
| | |
-
| | | |
-
| | | |
($0.03
|
)
|
|
|
| |
FOURTH-QUARTER 2013****
|
| |
CONTINUING OPERATIONS
|
| | | |
Acquisition-
| |
Retirement-
| | |
| | | |
Related
| |
Related
| |
Operating
|
| |
GAAP
| |
Adjustments*
| |
Adjustments**
| |
(Non-GAAP)
|
Gross Profit
| |
$
|
14,337
| | |
$
|
105
| | |
$
|
154
| | |
$
|
14,596
| |
| | | | | | | |
|
Gross Profit Margin
| | |
52.4
|
%
| |
0.4Pts
| |
0.6Pts
| | |
53.3
|
%
|
| | | | | | | |
|
S,G&A
| | |
5,987
| | | |
(101
|
)
| | |
(90
|
)
| | |
5,796
| |
| | | | | | | |
|
R,D&E
| | |
1,452
| | | |
-
| | | |
(14
|
)
| | |
1,438
| |
| | | | | | | |
|
Other (Income) & Expense
| | |
(116
|
)
| | |
(8
|
)
| | |
-
| | | |
(124
|
)
|
|
Total Expense & Other (Income)
| | |
7,235
| | | |
(109
|
)
| | |
(104
|
)
| | |
7,023
| |
|
Pre-Tax Income from
| | | | | | | | |
Continuing Operations
| | |
7,102
| | | |
213
| | | |
258
| | | |
7,574
| |
|
Pre-Tax Income Margin from
| | | | | | | | |
Continuing Operations
| | |
25.9
|
%
| |
0.8Pts
| |
0.9Pts
| | |
27.7
|
%
|
|
Provision for Income Taxes***
| | |
885
| | | |
(55
|
)
| | |
94
| | | |
925
| |
| | | | | | | |
|
Effective Tax Rate
| | |
12.5
|
%
| |
-1.1Pts
| |
0.8Pts
| | |
12.2
|
%
|
|
Income from Continuing Operations
| | |
6,216
| | | |
268
| | | |
164
| | | |
6,649
| |
|
Income Margin from
| | | | | | | | |
Continuing Operations
| | |
22.7
|
%
| |
1.0Pts
| |
0.6Pts
| | |
24.3
|
%
|
|
Loss from Discontinued Operations
| | | | | | | | |
Net of Taxes
| | |
(32
|
)
| | |
-
| | | |
-
| | | |
(32
|
)
|
| | | | | | | |
|
Net Income
| | |
6,185
| | | |
268
| | | |
164
| | | |
6,617
| |
| | | | | | | |
|
Diluted Earnings Per Share:
| | | | | | | | |
Continuing Operations
| |
$
|
5.76
| | |
$
|
0.25
| | |
$
|
0.15
| | |
$
|
6.16
| |
Discontinued Operations
| | |
($0.03
|
)
| | |
-
| | | |
-
| | | |
($0.03
|
)
|
*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.
|
INTERNATIONAL BUSINESS MACHINES CORPORATION
|
U.S. GAAP TO OPERATING RESULTS RECONCILIATION
|
(Unaudited; Dollars in millions except per share amounts)
|
|
|
|
TWELVE-MONTHS 2014
|
| |
CONTINUING OPERATIONS
|
| | |
|
Acquisition-
|
|
Retirement-
|
| |
| | | |
Related
| |
Related
| |
Operating
|
| |
GAAP
| |
Adjustments*
| |
Adjustments**
| |
(Non-GAAP)
|
Gross Profit
| |
$
|
46,407
| | |
$
|
416
| | |
$
|
173
| | |
$
|
46,996
| |
| | | | | | | |
|
Gross Profit Margin
| | |
50.0
|
%
| |
0.4Pts
| |
0.2Pts
| | |
50.6
|
%
|
| | | | | | | |
|
S,G&A
| | |
23,180
| | | |
(385
|
)
| | |
(257
|
)
| | |
22,537
| |
| | | | | | | |
|
R,D&E
| | |
5,437
| | | |
-
| | | |
77
| | | |
5,514
| |
|
Other (Income) & Expense
| | |
(1,938
|
)
| | |
(1
|
)
| | |
-
| | | |
(1,939
|
)
|
|
Total Expense & Other (Income)
| | |
26,421
| | | |
(386
|
)
| | |
(180
|
)
| | |
25,855
| |
|
Pre-Tax Income from
| | | | | | | | |
Continuing Operations
| | |
19,986
| | | |
803
| | | |
353
| | | |
21,142
| |
|
Pre-Tax Income Margin from
| | | | | | | | |
Continuing Operations
| | |
21.5
|
%
| |
0.9Pts
| |
0.4Pts
| | |
22.8
|
%
|
| | | | | | | |
|
Provision for Income Taxes***
| | |
4,234
| | | |
133
| | | |
73
| | | |
4,440
| |
| | | | | | | |
|
Effective Tax Rate
| | |
21.2
|
%
| |
-0.2Pts
| |
0.0Pts
| | |
21.0
|
%
|
|
Income from Continuing Operations
| | |
15,751
| | | |
670
| | | |
280
| | | |
16,702
| |
|
Income Margin from
| | | | | | | | |
Continuing Operations
| | |
17.0
|
%
| |
0.7Pts
| |
0.3Pts
| | |
18.0
|
%
|
|
Loss from Discontinued Operations
| | | | | | | | |
Net of Taxes
| | |
(3,729
|
)
| | |
-
| | | |
-
| | | |
(3,729
|
)
|
| | | | | | | |
|
Net Income
| | |
12,022
| | | |
670
| | | |
280
| | | |
12,973
| |
| | | | | | | |
|
Diluted Earnings Per Share:
| | | | | | | | |
Continuing Operations
| |
$
|
15.59
| | |
$
|
0.66
| | |
$
|
0.28
| | |
$
|
16.53
| |
Discontinued Operations
| | |
($3.69
|
)
| | |
-
| | | |
-
| | | |
($3.69
|
)
|
|
|
| |
TWELVE-MONTHS 2013****
|
| |
CONTINUING OPERATIONS
|
| | | |
Acquisition-
| |
Retirement-
| | |
| | | |
Related
| |
Related
| |
Operating
|
| |
GAAP
| |
Adjustments*
| |
Adjustments**
| |
(Non-GAAP)
|
Gross Profit
| |
$
|
48,684
| | |
$
|
394
| | |
$
|
629
| | |
$
|
49,706
| |
| | | | | | | |
|
Gross Profit Margin
| | |
49.5
|
%
| |
0.4Pts
| |
0.6Pts
| | |
50.5
|
%
|
| | | | | | | |
|
S,G&A
| | |
23,451
| | | |
(394
|
)
| | |
(376
|
)
| | |
22,680
| |
| | | | | | | |
|
R,D&E
| | |
5,743
| | | |
-
| | | |
(57
|
)
| | |
5,686
| |
|
Other (Income) & Expense
| | |
(333
|
)
| | |
(16
|
)
| | |
-
| | | |
(349
|
)
|
|
Total Expense & Other (Income)
| | |
28,440
| | | |
(410
|
)
| | |
(433
|
)
| | |
27,597
| |
| | | | | | | |
|
Pre-Tax Income from
| | | | | | | | |
Continuing Operations
| | |
20,244
| | | |
804
| | | |
1,062
| | | |
22,110
| |
|
Pre-Tax Income Margin from
| | | | | | | | |
Continuing Operations
| | |
20.6
|
%
| |
0.8Pts
| |
1.1Pts
| | |
22.5
|
%
|
|
Provision for Income Taxes***
| | |
3,363
| | | |
57
| | | |
333
| | | |
3,753
| |
| | | | | | | |
|
Effective Tax Rate
| | |
16.6
|
%
| |
-0.4Pts
| |
0.7Pts
| | |
17.0
|
%
|
|
Income from Continuing Operations
| | |
16,881
| | | |
747
| | | |
729
| | | |
18,356
| |
|
Income Margin from
| | | | | | | | |
Continuing Operations
| | |
17.2
|
%
| |
0.8Pts
| |
0.7Pts
| | |
18.7
|
%
|
|
Loss from Discontinued Operations
| | | | | | | | |
Net of Taxes
| | |
(398
|
)
| | |
-
| | | |
-
| | | |
(398
|
)
|
| | | | | | | |
|
Net Income
| | |
16,483
| | | |
747
| | | |
729
| | | |
17,959
| |
| | | | | | | |
|
Diluted Earnings Per Share:
| | | | | | | | |
Continuing Operations
| |
$
|
15.30
| | |
$
|
0.68
| | |
$
|
0.66
| | |
$
|
16.64
| |
Discontinued Operations
| | |
($0.36
|
)
| | |
-
| | | |
-
| | | |
($0.36
|
)
|
*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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