[January 19, 2017] |
|
IBM Reports 2016 Fourth-Quarter and Full-Year Results
IBM (NYSE:IBM)
Continued Strong Growth in Strategic Imperatives Led by IBM Cloud
Highlights
-
Diluted EPS from continuing operations: GAAP of $4.73; Operating
(non-GAAP) of $5.01
-
Revenue from continuing operations of $21.8 billion
-
Strategic imperatives revenue for full-year 2016 of $32.8 billion
up 13 percent (up 14 percent adjusting for currency) represents 41
percent of IBM revenue
-
Cloud revenue of $13.7 billion for full-year 2016, up 35 percent
--
Cloud as-a-service annual exit run rate of $8.6 billion at year end,
up 61 percent year to year (up 63 percent adjusting for currency)
-
2017 EPS Expectations: GAAP of at least $11.95; Operating
(non-GAAP) of at least $13.80
IBM (NYSE:IBM) today announced fourth-quarter and full-year 2016
earnings results.
"In 2016, our strategic imperatives grew to represent more than 40
percent of our total revenue and we have established ourselves as the
industry's leading cognitive solutions and cloud platform company," said
Ginni Rometty, IBM chairman, president and chief executive officer. "IBM
Watson is the world's leading AI platform for business, and emerging
solutions such as IBM Blockchain are enabling new levels of trust in
transactions of every kind. More and more clients are choosing the IBM
Cloud because of its differentiated capabilities, which are helping to
transform industries, such as financial services, airlines and retail."
|
|
FOURTH QUARTER 2016
|
|
|
|
|
|
|
Gross Profit
|
|
|
Diluted EPS
|
|
Net Income
|
|
Margin
|
|
|
|
|
|
|
|
GAAP from Continuing Operations
|
|
$4.73
|
|
$4.5B
|
|
50.0%
|
Year/Year
|
|
3%
|
|
1%
|
|
-1.7Pts
|
|
|
|
|
|
|
|
Operating (Non-GAAP)
|
|
$5.01
|
|
$4.8B
|
|
51.0%
|
Year/Year
|
|
4%
|
|
1%
|
|
-1.8Pts
|
|
|
|
|
|
|
|
|
|
Strategic
|
|
|
REVENUE
|
|
Total IBM
|
|
Imperatives
|
|
Cloud
|
|
|
|
|
|
|
|
As reported (US$)
|
|
$21.8B
|
|
$9.5B
|
|
$4.2B
|
|
|
|
|
|
|
|
Year/Year
|
|
-1%
|
|
11%
|
|
33%
|
Year/Year adjusting for currency
|
|
-1%
|
|
12%
|
|
33%
|
|
"In 2016, we again made substantial capital investments, increased our
R&D spending and acquired 15 companies -- a total of more than $15
billion across these elements. The acquisitions further strengthened our
capabilities in analytics, security, cognitive and cloud, while
expanding our level of industry expertise with additions such as Truven
Health Analytics and Promontory Financial Group," said Martin Schroeter,
IBM senior vice president and chief financial officer. "At the same
time, we returned almost $9 billion to shareholders through dividends
and gross share repurchases."
Strategic Imperatives
Fourth-quarter cloud revenues increased 33 percent. The annual exit run
rate for cloud as-a-service revenue increased to $8.6 billion from $5.3
billion at year-end 2015. Revenues from analytics increased 9 percent.
Revenues from mobile increased 16 percent (up 17 percent adjusting for
currency) and revenues from security increased 7 percent (up 8 percent
adjusting for currency).
For the full year, revenues from strategic imperatives increased 13
percent (up 14 percent adjusting for currency). Cloud revenues increased
35 percent to $13.7 billion. The annual exit run rate for cloud
as-a-service revenue increased 61 percent (up 63 percent adjusting for
currency) year to year. Revenues from analytics increased 9 percent.
Revenues from mobile increased 34 percent (up 35 percent adjusting for
currency) and from security increased 13 percent (up 14 percent
adjusting for currency).
Full-Year 2017 Expectations
The company expects operating (non-GAAP) diluted earnings per share of
at least $13.80 and GAAP diluted earnings per share of at least $11.95.
Operating (non-GAAP) diluted earnings per share exclude $1.85 per share
of charges for amortization of purchased intangible assets, other
acquisition-related charges and retirement-related charges. IBM expects
a free cash flow realization rate in excess of 90 percent of GAAP net
income.
Cash Flow and Balance Sheet
In the fourth quarter, the company generated net cash from operating
activities of $3.2 billion; or $5.6 billion excluding Global Financing
receivables. IBM's free cash flow was $4.7 billion. IBM returned $1.3
billion in dividends and $0.9 billion of gross share repurchases to
shareholders. At the end of December 2016, IBM had $5.1 billion
remaining in the current share repurchase authorization.
The company generated full-year free cash flow of $11.6 billion,
excluding Global Financing receivables. The company returned $8.8
billion to shareholders through $5.3 billion in dividends and $3.5
billion of gross share repurchases.
IBM ended the fourth-quarter 2016 with $8.5 billion of cash on hand.
Debt, including Global Financing debt of $27.9 billion, totaled $42.2
billion. Core (non-Global Financing) debt totaled $14.3 billion. The
balance sheet remains strong and is well positioned to support the
business over the long term.
Segment Results for Fourth Quarter
-
Cognitive Solutions (includes solutions software and transaction
processing software) -- revenues of $5.3 billion, up 1.4 percent
(up 2.2 percent adjusting for currency) were driven by growth in
cloud, analytics and security.
-
Global Business Services (includes consulting, global process
services and application management) -- revenues of $4.1 billion,
down 4.1 percent (down 3.6 percent adjusting for currency).
-
Technology Services & Cloud Platforms (includes
infrastructure services, technical support services and integration
software) -- revenues of $9.3 billion, up 1.7 percent (up 2.4
percent adjusting for currency). Growth was driven by strong hybrid
cloud services, analytics and security performance.
-
Systems (includes systems hardware and operating systems software)
-- revenues of $2.5 billion, down 12.5 percent (down 12.1 percent
adjusting for currency). Gross profit margins improved driven by z
Systems performance.
-
Global Financing (includes financing and used equipment sales) --
revenues of $447 million, down 1.5 percent (down 2.1 percent adjusting
for currency).
Full-Year 2016 Results
Diluted earnings per share from continuing operations were $12.39, down
9 percent compared to the 2015 period. Net income from continuing
operations for the twelve months ended December 31, 2016 was $11.9
billion compared with $13.4 billion in the year-ago period, a decrease
of 11 percent.
Consolidated net income was $11.9 billion compared to $13.2 billion in
the year-ago period. Consolidated diluted earnings per share were $12.38
compared to $13.42, down 8 percent year to year. Revenues from
continuing operations for the twelve-month period totaled $79.9 billion,
a decrease of 2 percent year to year compared with $81.7 billion for the
twelve months of 2015.
Operating (non-GAAP) diluted earnings per share from continuing
operations were $13.59 compared with $14.92 per diluted share for the
2015 period, a decrease of 9 percent. Operating (non-GAAP) net income
from continuing operations for the twelve months ended December 31, 2016
was $13.0 billion compared with $14.7 billion in the year-ago period, a
decrease of 11 percent.
|
|
FULL YEAR 2016
|
|
|
|
|
|
|
Gross Profit
|
|
|
Diluted EPS
|
|
Net Income
|
|
Margin
|
|
|
|
|
|
|
|
GAAP from Continuing Operations
|
|
$12.39
|
|
$11.9B
|
|
47.9%
|
Year/Year
|
|
-9%
|
|
-11%
|
|
-1.9 Pts
|
|
|
|
|
|
|
|
Operating (Non-GAAP)
|
|
$13.59
|
|
$13.0B
|
|
48.9%
|
Year/Year
|
|
-9%
|
|
-11%
|
|
-1.9 Pts
|
|
|
|
|
|
|
|
|
|
Strategic
|
|
|
REVENUE
|
|
Total IBM
|
|
Imperatives
|
|
Cloud
|
|
|
|
|
|
|
|
As reported (US$)
|
|
$79.9B
|
|
$32.8B
|
|
$13.7B
|
|
|
|
|
|
|
|
Year/Year
|
|
-2%
|
|
13%
|
|
35%
|
Year/Year adjusting for currency
|
|
-2%
|
|
14%
|
|
35%
|
|
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; product quality issues; impacts of 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 and ecosystems; 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 --
-
presenting operating (non-GAAP) earnings per share amounts and related
income statement items;
-
adjusting for free cash flow;
-
adjusting for currency (i.e., at constant currency).
Free cash flow guidance is derived using an estimate of profit, working
capital and operational cash outflows. The company views Global
Financing receivables as a profit-generating investment, which it seeks
to maximize and therefore it is not considered when formulating guidance
for free cash flow. As a result, the company does not estimate a GAAP
Net Cash from Operations expectation metric.
The rationale for management's use of these non-GAAP measures is
included in Exhibit 99.2 in 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 5:00 p.m. EST, today. The Webcast may be accessed via a link at http://www.ibm.com/investor/events/earnings/4q16.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,
|
|
|
2016
|
|
2015*
|
|
|
2016
|
|
2015*
|
|
|
|
|
|
|
|
|
|
|
REVENUE
|
|
|
|
|
|
|
|
|
|
Cognitive Solutions
|
|
$
|
5,297
|
|
|
$
|
5,225
|
|
|
|
$
|
18,187
|
|
|
$
|
17,841
|
|
Global Business Services
|
|
|
4,121
|
|
|
|
4,297
|
|
|
|
|
16,700
|
|
|
|
17,166
|
|
Technology Services & Cloud Platforms
|
|
|
9,308
|
|
|
|
9,149
|
|
|
|
|
35,337
|
|
|
|
35,142
|
|
Systems
|
|
|
2,530
|
|
|
|
2,892
|
|
|
|
|
7,714
|
|
|
|
9,547
|
|
Global Financing
|
|
|
447
|
|
|
|
454
|
|
|
|
|
1,692
|
|
|
|
1,840
|
|
Other
|
|
|
66
|
|
|
|
43
|
|
|
|
|
289
|
|
|
|
206
|
|
TOTAL REVENUE
|
|
|
21,770
|
|
|
|
22,059
|
|
|
|
|
79,919
|
|
|
|
81,741
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT
|
|
|
10,893
|
|
|
|
11,407
|
|
|
|
|
38,294
|
|
|
|
40,684
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT MARGIN
|
|
|
|
|
|
|
|
|
|
Cognitive Solutions
|
|
|
82.7
|
%
|
|
|
85.7
|
%
|
|
|
|
81.9
|
%
|
|
|
85.1
|
%
|
Global Business Services
|
|
|
26.9
|
%
|
|
|
28.2
|
%
|
|
|
|
27.0
|
%
|
|
|
28.2
|
%
|
Technology Services & Cloud Platforms
|
|
|
42.9
|
%
|
|
|
44.3
|
%
|
|
|
|
41.9
|
%
|
|
|
42.7
|
%
|
Systems
|
|
|
56.9
|
%
|
|
|
55.8
|
%
|
|
|
|
55.7
|
%
|
|
|
55.8
|
%
|
Global Financing
|
|
|
36.2
|
%
|
|
|
39.9
|
%
|
|
|
|
38.7
|
%
|
|
|
45.6
|
%
|
|
|
|
|
|
|
|
|
|
|
TOTAL GROSS PROFIT MARGIN
|
|
|
50.0
|
%
|
|
|
51.7
|
%
|
|
|
|
47.9
|
%
|
|
|
49.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSE AND OTHER INCOME
|
|
|
|
|
|
|
|
|
|
S,G&A
|
|
|
4,976
|
|
|
|
5,157
|
|
|
|
|
21,069
|
|
|
|
20,430
|
|
R,D&E
|
|
|
1,431
|
|
|
|
1,362
|
|
|
|
|
5,751
|
|
|
|
5,247
|
|
Intellectual property and
|
|
|
|
|
|
|
|
|
|
custom development income
|
|
|
(521
|
)
|
|
|
(193
|
)
|
|
|
|
(1,631
|
)
|
|
|
(682
|
)
|
Other (income) and expense
|
|
|
(136
|
)
|
|
|
(146
|
)
|
|
|
|
145
|
|
|
|
(724
|
)
|
Interest expense
|
|
|
157
|
|
|
|
128
|
|
|
|
|
630
|
|
|
|
468
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL EXPENSE AND OTHER INCOME
|
|
|
5,907
|
|
|
|
6,308
|
|
|
|
|
25,964
|
|
|
|
24,740
|
|
|
|
|
|
|
|
|
|
|
|
INCOME FROM CONTINUING OPERATIONS
|
|
|
|
|
|
|
|
|
|
BEFORE INCOME TAXES
|
|
|
4,986
|
|
|
|
5,098
|
|
|
|
|
12,330
|
|
|
|
15,945
|
|
Pre-tax margin
|
|
|
22.9
|
%
|
|
|
23.1
|
%
|
|
|
|
15.4
|
%
|
|
|
19.5
|
%
|
|
|
|
|
|
|
|
|
|
|
Provision for / (Benefit) from income taxes
|
|
|
480
|
|
|
|
638
|
|
|
|
|
449
|
|
|
|
2,581
|
|
Effective tax rate
|
|
|
9.6
|
%
|
|
|
12.5
|
%
|
|
|
|
3.6
|
%
|
|
|
16.2
|
%
|
|
|
|
|
|
|
|
|
|
|
INCOME FROM CONTINUING OPERATIONS
|
|
$
|
4,505
|
|
|
$
|
4,460
|
|
|
|
$
|
11,881
|
|
|
$
|
13,364
|
|
|
|
|
|
|
|
|
|
|
|
DISCONTINUED OPERATIONS
|
|
|
|
|
|
|
|
|
|
Income/(Loss) from discontinued operations, net of taxes
|
|
|
(4
|
)
|
|
|
3
|
|
|
|
|
(9
|
)
|
|
|
(174
|
)
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
|
|
$
|
4,501
|
|
|
$
|
4,463
|
|
|
|
$
|
11,872
|
|
|
$
|
13,190
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER SHARE OF COMMON STOCK:
|
|
|
|
|
|
|
|
|
|
Assuming Dilution
|
|
|
|
|
|
|
|
|
|
Continuing Operations
|
|
$
|
4.73
|
|
|
$
|
4.59
|
|
|
|
$
|
12.39
|
|
|
$
|
13.60
|
|
Discontinued Operations
|
|
|
($0.01
|
)
|
|
$
|
0.00
|
|
|
|
|
($0.01
|
)
|
|
|
($0.18
|
)
|
TOTAL
|
|
$
|
4.72
|
|
|
$
|
4.59
|
|
|
|
$
|
12.38
|
|
|
$
|
13.42
|
|
Basic
|
|
|
|
|
|
|
|
|
|
Continuing Operations
|
|
$
|
4.75
|
|
|
$
|
4.60
|
|
|
|
$
|
12.44
|
|
|
$
|
13.66
|
|
Discontinued Operations
|
|
|
($0.01
|
)
|
|
$
|
0.00
|
|
|
|
|
($0.01
|
)
|
|
|
($0.18
|
)
|
TOTAL
|
|
$
|
4.74
|
|
|
$
|
4.60
|
|
|
|
$
|
12.43
|
|
|
$
|
13.48
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES
|
|
|
|
|
|
|
|
|
|
OUTSTANDING (M's):
|
|
|
|
|
|
|
|
|
|
Assuming Dilution
|
|
|
952.7
|
|
|
|
972.8
|
|
|
|
|
958.7
|
|
|
|
982.7
|
|
Basic
|
|
|
948.6
|
|
|
|
969.4
|
|
|
|
|
955.4
|
|
|
|
978.7
|
|
|
* Recast to conform with 2016 segment presentation.
|
|
INTERNATIONAL BUSINESS MACHINES CORPORATION
|
CONDENSED CONSOLIDATED BALANCE SHEET
|
(Unaudited)
|
|
|
At
|
|
At
|
(Dollars in Millions)
|
|
December 31,
|
|
December 31,
|
|
|
2016
|
|
2015
|
ASSETS:
|
|
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
7,826
|
|
|
$
|
7,686
|
|
Marketable securities
|
|
|
701
|
|
|
|
508
|
|
Notes and accounts receivable - trade, net
|
|
|
9,182
|
|
|
|
8,333
|
|
Short-term financing receivables, net
|
|
|
19,006
|
|
|
|
19,020
|
|
Other accounts receivable, net
|
|
|
1,057
|
|
|
|
1,201
|
|
Inventory
|
|
|
1,553
|
|
|
|
1,551
|
|
Prepaid expenses and other current assets
|
|
|
4,564
|
|
|
|
4,205
|
|
|
|
|
|
|
Total Current Assets
|
|
|
43,888
|
|
|
|
42,504
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
10,830
|
|
|
|
10,727
|
|
Long-term financing receivables, net
|
|
|
9,021
|
|
|
|
10,013
|
|
Prepaid pension assets
|
|
|
3,034
|
|
|
|
1,734
|
|
Deferred taxes
|
|
|
5,224
|
|
|
|
4,822
|
|
Goodwill and intangibles, net
|
|
|
40,887
|
|
|
|
35,508
|
|
Investments and sundry assets
|
|
|
4,585
|
|
|
|
5,187
|
|
|
|
|
|
|
Total Assets
|
|
$
|
117,470
|
|
|
$
|
110,495
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES:
|
|
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
Taxes
|
|
$
|
3,235
|
|
|
$
|
2,847
|
|
Short-term debt
|
|
|
7,513
|
|
|
|
6,461
|
|
Accounts payable
|
|
|
6,209
|
|
|
|
6,028
|
|
Deferred income
|
|
|
11,035
|
|
|
|
11,021
|
|
Other liabilities
|
|
|
8,283
|
|
|
|
7,913
|
|
|
|
|
|
|
Total Current Liabilities
|
|
|
36,275
|
|
|
|
34,269
|
|
|
|
|
|
|
Long-term debt
|
|
|
34,655
|
|
|
|
33,428
|
|
Retirement related obligations
|
|
|
17,070
|
|
|
|
16,504
|
|
Deferred income
|
|
|
3,600
|
|
|
|
3,771
|
|
Other liabilities
|
|
|
7,477
|
|
|
|
8,099
|
|
|
|
|
|
|
Total Liabilities
|
|
|
99,078
|
|
|
|
96,071
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY:
|
|
|
|
|
|
|
|
|
|
IBM Stockholders' Equity:
|
|
|
|
|
Common stock
|
|
|
53,935
|
|
|
|
53,262
|
|
Retained earnings
|
|
|
152,759
|
|
|
|
146,124
|
|
Treasury stock -- at cost
|
|
|
(159,050
|
)
|
|
|
(155,518
|
)
|
Accumulated other comprehensive income/(loss)
|
|
|
(29,398
|
)
|
|
|
(29,607
|
)
|
|
|
|
|
|
Total IBM stockholders' equity
|
|
|
18,246
|
|
|
|
14,262
|
|
|
|
|
|
|
Noncontrolling interests
|
|
|
146
|
|
|
|
162
|
|
|
|
|
|
|
Total Equity
|
|
|
18,392
|
|
|
|
14,424
|
|
|
|
|
|
|
Total Liabilities and Equity
|
|
$
|
117,470
|
|
|
$
|
110,495
|
|
|
INTERNATIONAL BUSINESS MACHINES CORPORATION
|
CASH FLOW ANALYSIS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
(Dollars in Millions)
|
|
December 31,
|
|
December 31,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
Net Cash Provided by Operating Activities per GAAP:
|
|
$
|
3,217
|
|
|
$
|
5,278
|
|
|
$
|
16,518
|
|
|
$
|
17,008
|
|
|
|
|
|
|
|
|
|
|
Less: change in Global Financing (GF)
|
|
|
|
|
|
|
|
|
Receivables
|
|
|
(2,429
|
)
|
|
|
(1,810
|
)
|
|
|
1,218
|
|
|
|
152
|
|
Capital Expenditures, Net
|
|
|
(925
|
)
|
|
|
(1,016
|
)
|
|
|
(3,726
|
)
|
|
|
(3,780
|
)
|
|
|
|
|
|
|
|
|
|
Free Cash Flow
|
|
|
4,721
|
|
|
|
6,072
|
|
|
|
11,574
|
|
|
|
13,075
|
|
|
|
|
|
|
|
|
|
|
Acquisitions
|
|
|
(235
|
)
|
|
|
(2,529
|
)
|
|
|
(5,679
|
)
|
|
|
(3,349
|
)
|
Divestitures
|
|
|
(490
|
)
|
|
|
87
|
|
|
|
(454
|
)
|
|
|
(401
|
)
|
Dividends
|
|
|
(1,329
|
)
|
|
|
(1,261
|
)
|
|
|
(5,256
|
)
|
|
|
(4,897
|
)
|
Share Repurchase
|
|
|
(871
|
)
|
|
|
(764
|
)
|
|
|
(3,502
|
)
|
|
|
(4,609
|
)
|
Non-GF Debt
|
|
|
(2,048
|
)
|
|
|
(898
|
)
|
|
|
1,317
|
|
|
|
(128
|
)
|
Other (includes GF Receivables and GF Debt)
|
|
|
(1,189
|
)
|
|
|
(2,080
|
)
|
|
|
2,333
|
|
|
|
28
|
|
|
|
|
|
|
|
|
|
|
Change in Cash, Cash Equivalents and
|
|
|
|
|
|
|
|
|
Short-term Marketable Securities
|
|
|
($1,441
|
)
|
|
|
($1,373
|
)
|
|
$
|
332
|
|
|
|
($282
|
)
|
|
INTERNATIONAL BUSINESS MACHINES CORPORATION
|
CASH FLOW
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
(Dollars in Millions)
|
|
December 31,
|
|
December 31,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
Net Income from Operations
|
|
$
|
4,501
|
|
|
$
|
4,463
|
|
|
$
|
11,872
|
|
|
$
|
13,190
|
|
Depreciation/Amortization of Intangibles
|
|
|
1,127
|
|
|
|
990
|
|
|
|
4,381
|
|
|
|
3,856
|
|
Stock-based Compensation
|
|
|
141
|
|
|
|
99
|
|
|
|
544
|
|
|
|
468
|
|
Working Capital / Other
|
|
|
(124
|
)
|
|
|
1,514
|
|
|
|
(1,497
|
)
|
|
|
(729
|
)
|
Global Financing A/R
|
|
|
(2,429
|
)
|
|
|
(1,810
|
)
|
|
|
1,218
|
|
|
|
152
|
|
Loss on Microelectronics Business Disposal
|
|
|
0
|
|
|
|
23
|
|
|
|
0
|
|
|
|
71
|
|
Net Cash Provided by Operating Activities
|
|
$
|
3,217
|
|
|
$
|
5,278
|
|
|
$
|
16,518
|
|
|
$
|
17,008
|
|
Capital Expenditures, net of payments & proceeds
|
|
|
(925
|
)
|
|
|
(1,016
|
)
|
|
|
(3,726
|
)
|
|
|
(3,780
|
)
|
Divestitures, net of cash transferred
|
|
|
(490
|
)
|
|
|
87
|
|
|
|
(454
|
)
|
|
|
(401
|
)
|
Acquisitions, net of cash acquired
|
|
|
(235
|
)
|
|
|
(2,529
|
)
|
|
|
(5,679
|
)
|
|
|
(3,349
|
)
|
Marketable Securities / Other Investments, net
|
|
|
(1,286
|
)
|
|
|
(1,987
|
)
|
|
|
(676
|
)
|
|
|
(629
|
)
|
Net Cash Used in Investing Activities
|
|
|
($2,936
|
)
|
|
|
($5,445
|
)
|
|
|
($10,536
|
)
|
|
|
($8,159
|
)
|
Debt, net of payments & proceeds
|
|
|
875
|
|
|
|
626
|
|
|
|
2,763
|
|
|
|
19
|
|
Dividends
|
|
|
(1,329
|
)
|
|
|
(1,261
|
)
|
|
|
(5,256
|
)
|
|
|
(4,897
|
)
|
Common Stock Repurchases
|
|
|
(871
|
)
|
|
|
(764
|
)
|
|
|
(3,502
|
)
|
|
|
(4,609
|
)
|
Common Stock Transactions - Other
|
|
|
37
|
|
|
|
50
|
|
|
|
204
|
|
|
|
322
|
|
Net Cash Used in Financing Activities
|
|
|
($1,287
|
)
|
|
|
($1,348
|
)
|
|
|
($5,791
|
)
|
|
|
($9,166
|
)
|
Effect of Exchange Rate changes on Cash
|
|
|
(206
|
)
|
|
|
(279
|
)
|
|
|
(51
|
)
|
|
|
(473
|
)
|
Net Change in Cash & Cash Equivalents
|
|
|
($1,213
|
)
|
|
|
($1,794
|
)
|
|
$
|
140
|
|
|
|
($790
|
)
|
|
INTERNATIONAL BUSINESS MACHINES CORPORATION
|
SEGMENT DATA
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FOURTH - QUARTER 2016
|
|
|
Cognitive Solutions &
|
|
|
|
|
|
|
|
|
Industry Services
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology
|
|
|
|
|
|
|
|
|
Global
|
|
Services &
|
|
|
|
|
(Dollars in Millions)
|
|
Cognitive
|
|
Business
|
|
Cloud
|
|
|
|
Global
|
|
|
Solutions
|
|
Services
|
|
Platforms
|
|
Systems
|
|
Financing
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
External
|
|
$
|
5,297
|
|
|
$
|
4,121
|
|
|
$
|
9,308
|
|
|
$
|
2,530
|
|
|
$
|
447
|
|
Internal
|
|
|
701
|
|
|
|
100
|
|
|
|
214
|
|
|
|
156
|
|
|
|
462
|
|
Total Segment Revenue
|
|
$
|
5,999
|
|
|
$
|
4,221
|
|
|
$
|
9,522
|
|
|
$
|
2,686
|
|
|
$
|
909
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Income from Continuing Operations
|
|
|
2,313
|
|
|
|
522
|
|
|
|
1,882
|
|
|
|
579
|
|
|
|
448
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax margin
|
|
|
38.6
|
%
|
|
|
12.4
|
%
|
|
|
19.8
|
%
|
|
|
21.6
|
%
|
|
|
49.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change YTY Revenue - External
|
|
|
1.4
|
%
|
|
|
(4.1
|
)%
|
|
|
1.7
|
%
|
|
|
(12.5
|
)%
|
|
|
(1.5
|
)%
|
Change YTY Revenue - External @constant currency
|
|
|
2.2
|
%
|
|
|
(3.6
|
)%
|
|
|
2.4
|
%
|
|
|
(12.1
|
)%
|
|
|
(2.1
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FOURTH - QUARTER 2015*
|
|
|
Cognitive Solutions &
|
|
|
|
|
|
|
|
|
Industry Services
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology
|
|
|
|
|
|
|
|
|
Global
|
|
Services &
|
|
|
|
|
(Dollars in Millions)
|
|
Cognitive
|
|
Business
|
|
Cloud
|
|
|
|
Global
|
|
|
Solutions
|
|
Services
|
|
Platforms
|
|
Systems
|
|
Financing
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
External
|
|
$
|
5,225
|
|
|
$
|
4,297
|
|
|
$
|
9,149
|
|
|
$
|
2,892
|
|
|
$
|
454
|
|
Internal
|
|
|
520
|
|
|
|
118
|
|
|
|
198
|
|
|
|
207
|
|
|
|
763
|
|
Total Segment Revenue
|
|
$
|
5,744
|
|
|
$
|
4,415
|
|
|
$
|
9,347
|
|
|
$
|
3,099
|
|
|
$
|
1,216
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Income from Continuing Operations
|
|
|
2,296
|
|
|
|
707
|
|
|
|
1,808
|
|
|
|
674
|
|
|
|
674
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax margin
|
|
|
40.0
|
%
|
|
|
16.0
|
%
|
|
|
19.3
|
%
|
|
|
21.7
|
%
|
|
|
55.4
|
%
|
|
|
|
|
|
* Recast to conform with 2016 segment presentation.
|
|
|
|
|
|
INTERNATIONAL BUSINESS MACHINES CORPORATION
|
SEGMENT DATA
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TWELVE - MONTHS 2016
|
|
|
Cognitive Solutions &
|
|
|
|
|
|
|
|
|
Industry Services
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology
|
|
|
|
|
|
|
|
|
Global
|
|
Services &
|
|
|
|
|
(Dollars in Millions)
|
|
Cognitive
|
|
Business
|
|
Cloud
|
|
|
|
Global
|
|
|
Solutions
|
|
Services
|
|
Platforms
|
|
Systems
|
|
Financing
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
External
|
|
$
|
18,187
|
|
|
$
|
16,700
|
|
|
$
|
35,337
|
|
|
$
|
7,714
|
|
|
$
|
1,692
|
|
Internal
|
|
|
2,630
|
|
|
|
409
|
|
|
|
715
|
|
|
|
750
|
|
|
|
1,802
|
|
Total Segment Revenue
|
|
$
|
20,817
|
|
|
$
|
17,109
|
|
|
$
|
36,052
|
|
|
$
|
8,464
|
|
|
$
|
3,494
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Income from Continuing Operations
|
|
|
6,352
|
|
|
|
1,732
|
|
|
|
4,707
|
|
|
|
933
|
|
|
|
1,656
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax margin
|
|
|
30.5
|
%
|
|
|
10.1
|
%
|
|
|
13.1
|
%
|
|
|
11.0
|
%
|
|
|
47.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change YTY Revenue - External
|
|
|
1.9
|
%
|
|
|
(2.7
|
)%
|
|
|
0.6
|
%
|
|
|
(19.2
|
)%
|
|
|
(8.0
|
)%
|
Change YTY Revenue - External @constant currency
|
|
|
2.7
|
%
|
|
|
(2.5
|
)%
|
|
|
1.4
|
%
|
|
|
(18.9
|
)%
|
|
|
(6.9
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TWELVE - MONTHS 2015*
|
|
|
Cognitive Solutions &
|
|
|
|
|
|
|
|
|
Industry Services
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology
|
|
|
|
|
|
|
|
|
Global
|
|
Services &
|
|
|
|
|
(Dollars in Millions)
|
|
Cognitive
|
|
Business
|
|
Cloud
|
|
|
|
Global
|
|
|
Solutions
|
|
Services
|
|
Platforms
|
|
Systems
|
|
Financing
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
External
|
|
$
|
17,841
|
|
|
$
|
17,166
|
|
|
$
|
35,142
|
|
|
$
|
9,547
|
|
|
$
|
1,840
|
|
Internal
|
|
|
2,215
|
|
|
|
499
|
|
|
|
698
|
|
|
|
778
|
|
|
|
2,637
|
|
Total Segment Revenue
|
|
$
|
20,055
|
|
|
$
|
17,664
|
|
|
$
|
35,840
|
|
|
$
|
10,325
|
|
|
$
|
4,477
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Income from Continuing Operations
|
|
|
7,245
|
|
|
|
2,602
|
|
|
|
5,669
|
|
|
|
1,722
|
|
|
|
2,364
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax margin
|
|
|
36.1
|
%
|
|
|
14.7
|
%
|
|
|
15.8
|
%
|
|
|
16.7
|
%
|
|
|
52.8
|
%
|
|
|
|
|
|
* Recast to conform with 2016 segment presentation.
|
|
INTERNATIONAL BUSINESS MACHINES CORPORATION
|
U.S. GAAP TO OPERATING (Non-GAAP) RESULTS RECONCILIATION
|
(Unaudited; Dollars in millions except per share amounts)
|
|
|
|
|
|
FOURTH - QUARTER 2016
|
|
|
CONTINUING OPERATIONS
|
|
|
|
|
Acquisition-
|
|
Retirement-
|
|
|
|
|
|
|
Related
|
|
Related
|
|
Operating
|
|
|
GAAP
|
|
Adjustments*
|
|
Adjustments**
|
|
(Non-GAAP)
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
$
|
10,893
|
|
|
$
|
124
|
|
|
$
|
78
|
|
|
$
|
11,095
|
|
|
|
|
|
|
|
|
|
|
Gross Profit Margin
|
|
|
50.0
|
%
|
|
0.6Pts
|
|
0.4Pts
|
|
|
51.0
|
%
|
|
|
|
|
|
|
|
|
|
S,G&A
|
|
|
4,976
|
|
|
|
(136
|
)
|
|
|
(69
|
)
|
|
|
4,771
|
|
|
|
|
|
|
|
|
|
|
R,D&E
|
|
|
1,431
|
|
|
|
- -
|
|
|
|
(6
|
)
|
|
|
1,425
|
|
|
|
|
|
|
|
|
|
|
Other (Income) & Expense
|
|
|
(136
|
)
|
|
|
0
|
|
|
|
- -
|
|
|
|
(136
|
)
|
|
|
|
|
|
|
|
|
|
Total Expense & Other (Income)
|
|
|
5,907
|
|
|
|
(136
|
)
|
|
|
(76
|
)
|
|
|
5,696
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Income from Continuing Operations
|
|
|
4,986
|
|
|
|
260
|
|
|
|
154
|
|
|
|
5,399
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Income Margin from Continuing Operations
|
|
|
22.9
|
%
|
|
1.2Pts
|
|
0.7Pts
|
|
|
24.8
|
%
|
|
|
|
|
|
|
|
|
|
Provision for Income Taxes***
|
|
|
480
|
|
|
|
66
|
|
|
|
77
|
|
|
|
623
|
|
|
|
|
|
|
|
|
|
|
Effective Tax Rate
|
|
|
9.6
|
%
|
|
0.8Pts
|
|
1.2Pts
|
|
|
11.5
|
%
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations
|
|
|
4,505
|
|
|
|
193
|
|
|
|
77
|
|
|
|
4,776
|
|
|
|
|
|
|
|
|
|
|
Income Margin from Continuing Operations
|
|
|
20.7
|
%
|
|
0.9Pts
|
|
0.4Pts
|
|
|
21.9
|
%
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share: Continuing Operations
|
|
$
|
4.73
|
|
|
$
|
0.20
|
|
|
$
|
0.08
|
|
|
$
|
5.01
|
|
|
|
|
|
|
|
|
|
|
|
|
FOURTH - QUARTER 2015
|
|
|
CONTINUING OPERATIONS
|
|
|
|
|
Acquisition-
|
|
Retirement-
|
|
|
|
|
|
|
Related
|
|
Related
|
|
Operating
|
|
|
GAAP
|
|
Adjustments*
|
|
Adjustments**
|
|
(Non-GAAP)
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
$
|
11,407
|
|
|
$
|
105
|
|
|
$
|
119
|
|
|
$
|
11,630
|
|
|
|
|
|
|
|
|
|
|
Gross Profit Margin
|
|
|
51.7
|
%
|
|
0.5Pts
|
|
0.5Pts
|
|
|
52.7
|
%
|
|
|
|
|
|
|
|
|
|
S,G&A
|
|
|
5,157
|
|
|
|
(95
|
)
|
|
|
(88
|
)
|
|
|
4,975
|
|
|
|
|
|
|
|
|
|
|
R,D&E
|
|
|
1,362
|
|
|
|
- -
|
|
|
|
(12
|
)
|
|
|
1,350
|
|
|
|
|
|
|
|
|
|
|
Other (Income) & Expense
|
|
|
(146
|
)
|
|
|
0
|
|
|
|
- -
|
|
|
|
(146
|
)
|
|
|
|
|
|
|
|
|
|
Total Expense & Other (Income)
|
|
|
6,308
|
|
|
|
(95
|
)
|
|
|
(100
|
)
|
|
|
6,114
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Income from Continuing Operations
|
|
|
5,098
|
|
|
|
199
|
|
|
|
218
|
|
|
|
5,516
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Income Margin from Continuing Operations
|
|
|
23.1
|
%
|
|
0.9Pts
|
|
1.0Pts
|
|
|
25.0
|
%
|
|
|
|
|
|
|
|
|
|
Provision for Income Taxes***
|
|
|
638
|
|
|
|
89
|
|
|
|
82
|
|
|
|
809
|
|
|
|
|
|
|
|
|
|
|
Effective Tax Rate
|
|
|
12.5
|
%
|
|
1.2Pts
|
|
1.0Pts
|
|
|
14.7
|
%
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations
|
|
|
4,460
|
|
|
|
110
|
|
|
|
137
|
|
|
|
4,707
|
|
|
|
|
|
|
|
|
|
|
Income Margin from Continuing Operations
|
|
|
20.2
|
%
|
|
0.5Pts
|
|
0.6Pts
|
|
|
21.3
|
%
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share: Continuing Operations
|
|
$
|
4.59
|
|
|
$
|
0.11
|
|
|
$
|
0.14
|
|
|
$
|
4.84
|
|
* Includes amortization of purchased intangible assets, in
process R&D, severance cost for acquired employees, vacant space
for acquired companies, deal costs and acquisition integration tax
charges.
|
** Includes retirement-related interest cost, expected return
on plan assets, recognized actuarial losses or gains, amortization
of transition assets, other settlements, curtailments,
multi-employer plans and insolvency insurance.
|
*** Tax impact on operating (non-GAAP) pre-tax income from
continuing operations is calculated under the same accounting
principles applied to the As Reported pre-tax income under ASC
740, which employs an annual effective tax rate method to the
results.
|
|
INTERNATIONAL BUSINESS MACHINES CORPORATION
|
U.S. GAAP TO OPERATING (Non-GAAP) RESULTS RECONCILIATION
|
(Unaudited; Dollars in millions except per share amounts)
|
|
|
|
|
|
TWELVE - MONTHS 2016
|
|
|
CONTINUING OPERATIONS
|
|
|
|
|
Acquisition-
|
|
Retirement-
|
|
|
|
|
|
|
Related
|
|
Related
|
|
Operating
|
|
|
GAAP
|
|
Adjustments*
|
|
Adjustments**
|
|
(Non-GAAP)
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
$
|
38,294
|
|
|
$
|
494
|
|
|
$
|
316
|
|
|
$
|
39,104
|
|
|
|
|
|
|
|
|
|
|
Gross Profit Margin
|
|
|
47.9
|
%
|
|
0.6Pts
|
|
0.4Pts
|
|
|
48.9
|
%
|
|
|
|
|
|
|
|
|
|
S,G&A
|
|
|
21,069
|
|
|
|
(501
|
)
|
|
|
(253
|
)
|
|
|
20,315
|
|
|
|
|
|
|
|
|
|
|
R,D&E
|
|
|
5,751
|
|
|
|
- -
|
|
|
|
(29
|
)
|
|
|
5,722
|
|
|
|
|
|
|
|
|
|
|
Other (Income) & Expense
|
|
|
145
|
|
|
|
(7
|
)
|
|
|
- -
|
|
|
|
138
|
|
|
|
|
|
|
|
|
|
|
Total Expense & Other (Income)
|
|
|
25,964
|
|
|
|
(508
|
)
|
|
|
(282
|
)
|
|
|
25,174
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Income from Continuing Operations
|
|
|
12,330
|
|
|
|
1,003
|
|
|
|
598
|
|
|
|
13,931
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Income Margin from Continuing Operations
|
|
|
15.4
|
%
|
|
1.3Pts
|
|
0.7Pts
|
|
|
17.4
|
%
|
|
|
|
|
|
|
|
|
|
Provision for / (Benefit) from Income Taxes***
|
|
|
449
|
|
|
|
268
|
|
|
|
183
|
|
|
|
900
|
|
|
|
|
|
|
|
|
|
|
Effective Tax Rate
|
|
|
3.6
|
%
|
|
1.7Pts
|
|
1.2Pts
|
|
|
6.5
|
%
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations
|
|
|
11,881
|
|
|
|
735
|
|
|
|
415
|
|
|
|
13,031
|
|
|
|
|
|
|
|
|
|
|
Income Margin from Continuing Operations
|
|
|
14.9
|
%
|
|
0.9Pts
|
|
0.5Pts
|
|
|
16.3
|
%
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share: Continuing Operations
|
|
$
|
12.39
|
|
|
$
|
0.77
|
|
|
$
|
0.43
|
|
|
$
|
13.59
|
|
|
|
|
|
|
|
|
|
|
|
|
TWELVE - MONTHS 2015
|
|
|
CONTINUING OPERATIONS
|
|
|
|
|
Acquisition-
|
|
Retirement-
|
|
|
|
|
|
|
Related
|
|
Related
|
|
Operating
|
|
|
GAAP
|
|
Adjustments*
|
|
Adjustments**
|
|
(Non-GAAP)
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
$
|
40,684
|
|
|
$
|
373
|
|
|
$
|
469
|
|
|
$
|
41,526
|
|
|
|
|
|
|
|
|
|
|
Gross Profit Margin
|
|
|
49.8
|
%
|
|
0.5Pts
|
|
0.6Pts
|
|
|
50.8
|
%
|
|
|
|
|
|
|
|
|
|
S,G&A
|
|
|
20,430
|
|
|
|
(324
|
)
|
|
|
(533
|
)
|
|
|
19,573
|
|
|
|
|
|
|
|
|
|
|
R,D&E
|
|
|
5,247
|
|
|
|
- -
|
|
|
|
(48
|
)
|
|
|
5,200
|
|
|
|
|
|
|
|
|
|
|
Other (Income) & Expense
|
|
|
(724
|
)
|
|
|
(5
|
)
|
|
|
- -
|
|
|
|
(729
|
)
|
|
|
|
|
|
|
|
|
|
Total Expense & Other (Income)
|
|
|
24,740
|
|
|
|
(330
|
)
|
|
|
(581
|
)
|
|
|
23,830
|
|
|
|
|
|
|
|
|
|
|
Pre-Tax Income from Continuing Operations
|
|
|
15,945
|
|
|
|
703
|
|
|
|
1,050
|
|
|
|
17,697
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Income Margin from Continuing Operations
|
|
|
19.5
|
%
|
|
0.9Pts
|
|
1.3Pts
|
|
|
21.6
|
%
|
|
|
|
|
|
|
|
|
|
Provision for Income Taxes***
|
|
|
2,581
|
|
|
|
141
|
|
|
|
316
|
|
|
|
3,037
|
|
|
|
|
|
|
|
|
|
|
Effective Tax Rate
|
|
|
16.2
|
%
|
|
0.2Pts
|
|
0.9Pts
|
|
|
17.2
|
%
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations
|
|
|
13,364
|
|
|
|
562
|
|
|
|
734
|
|
|
|
14,659
|
|
|
|
|
|
|
|
|
|
|
Income Margin from Continuing Operations
|
|
|
16.3
|
%
|
|
0.7Pts
|
|
0.9Pts
|
|
|
17.9
|
%
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share: Continuing Operations
|
|
$
|
13.60
|
|
|
$
|
0.57
|
|
|
$
|
0.75
|
|
|
$
|
14.92
|
|
* Includes amortization of purchased intangible assets, in
process R&D, severance cost for acquired employees, vacant space
for acquired companies, deal costs and acquisition integration tax
charges.
|
** Includes retirement-related interest cost, expected return
on plan assets, recognized actuarial losses or gains, amortization
of transition assets, other settlements, curtailments,
multi-employer plans and insolvency insurance.
|
*** Tax impact on operating (non-GAAP) pre-tax income from
continuing operations is calculated under the same accounting
principles applied to the As Reported pre-tax income under ASC
740, which employs an annual effective tax rate method to the
results.
|
|
INTERNATIONAL BUSINESS MACHINES CORPORATION
|
RECONCILIATION OF OPERATING EARNINGS PER SHARE
|
(Unaudited)
|
|
|
|
|
2017
|
EPS Guidance
|
|
|
|
Expectations
|
IBM GAAP EPS
|
|
at least $11.95
|
|
|
|
|
|
IBM Operating EPS (non-GAAP)
|
|
at least $13.80
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
Acquisition related charges *
|
|
$0.75
|
Non-Operating Retirement-Related Items
|
|
$1.10
|
|
|
|
|
|
* Includes acquisitions through December 31, 2016
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170119006193/en/
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