2012 Q2 Financial Snapshot (181 KB)

IBM Corporation Financial Profile
Recent Highlights:
July 2012
2Q'12 Performance reflects the strength of IBM's business model
Continued strong performance across IBM's growth initiatives
Expanded Operating (Non-GAAP) gross, pre-tax and net margins
Delivered 14% Yr/Yr Operating (Non-GAAP) EPS growth
Generated $3.7B of Free Cash Flow, +9% YtY, $18B over the last 12 months
Increased FY'12 Operating (Non-GAAP) EPS expectations to at least $15.10
($ in Billions, except per share amounts)
($ in Billions)
P&L Highlights
Revenue
@ constant currency
FY
2011
B/(W)
Yr/Yr
2Q
YTD
B/(W)
Yr/Yr
$106.9
7%
3%
$50.5
(2%)
1%
Pre-Tax Income - Operating
$21.6
9%
$9.5
6%
Net Income - Operating
$16.3
9%
$7.3
9%
$13.44
15%
$6.29
14%
EPS (Diluted) - Operating
Free Cash Flow*
$16.6
Assets
Cash & Marketable Securities
Global Financing Assets
Non-Global Financing Assets*
$5.5
Key P&L Metrics - Operating
Gross Profit Margin
Expense / Revenue % *
Pre-Tax Income Margin
Tax Rate
Net Income Margin
47.2%
27.0%
20.2%
24.5%
15.3%
Jun
2012
$11.9
$35.1
$69.4
$116.4
$11.2
$32.5
$70.2
$113.8
$23.3
$8.0
$64.9
$96.2
$22.6
$9.8
$60.8
$93.3
$20.2
$20.6
Liabilities
Global Financing Debt
Non-Global Financing Debt*
Other Liabilities
Equity
* Includes eliminations of inter-company activity
* Net Cash from Ops excl GF Receivables, less Capital Expenditures
FY
2011
Dec
2011
Balance Sheet
B/(W)
Yr/Yr
1.1 pts
(0.8 pts)
0.3 pts
(0.1 pts)
0.2 pts
2Q
YTD
B/(W)
Yr/Yr
47.0%
28.1%
18.9%
23.1%
14.6%
1.3
0.0
1.3
1.9
1.4
Dec
2011
Jun
2012
32%
7.2
1.6%
Aa3, A+
36%
7.0
1.7%
Aa3, AA-
Key Metrics
pts
pts
pts
pts
pts
Non GF Debt/Cap
Global Financing Leverage
Dividend Yield
Credit Rating (Moody's, S&P)
* Total Operating Expense & Other Income / Revenue
2011
Revenue by Geography (excludes OEM)
2011
Revenue by Business Segment
U.S.
33%
2011
Pre-Tax (Operating) Profit by Business Segment
Systems &
Financing
Systems &
Financing
Services
20%
Asia Pacific
24%
Can/
LA
16%
41%
Services
10%
Software
Software
57%
EMEA
23%
43%
33%
Five Year Summary
Operating (Non-GAAP) Margins
50%
Operating (Non-GAAP) EPS
(1)
Free Cash Flow ($B) (2)
42.6%
43.9%
45.7%
$16.6
'10
'11
$14.3
$13.44
40%
$16.3
$15.1
Gross Profit Margin
46.1%
47.2%
$12.4
$11.67
$10.03
$8.86
30%
$7.46
Pre-Tax Income Margin
PureSystems
20%
10%
15.4%
16.0%
'07
'08
18.9%
19.9%
20.2%
'09
'10
'11
0%
'07
'08
'09
'10
(1) From Continuing Operations
'07-'08 reflects the adoption of amendments to ASC 260, "Earnings Per Share"
'11
'07
'08
'09
(2) Net Cash from Operations excluding GF Receivables,
less Capital Expenditures
In an effort to provide additional and useful information regarding the company’s results as determined by generally accepted accounting principles (GAAP), these materials contain certain non-GAAP financial measures.
For reconciliation to GAAP and other information about 1Q 2012 non-GAAP measures and the March 2012 non GF debt-to-capital ratio, see Non-GAAP Supplemental Materials and related information in the Form 8-K
submitted to the SEC on April 17, 2012. For reconciliation to GAAP and other information about (i) FY 2011 non-GAAP measures (ii) December 2011 non GF debt-to-capital ratio, (iii) FY 2010 operating gross profit margin
and operating pre-tax income margin, and (iv) 2007-2010 operating EPS, see Non-GAAP Supplementary Materials and related information in the Form 8K submitted to the SEC on January 19, 2012. For reconciliation to
GAAP and other information about 2007 - 2010 free cash flow, see Non-GAAP Supplementary Materials and related information in the Form 8K submitted to the SEC on March 8, 2011. For reconciliation to GAAP and other
information about 2007 to 2009 operating gross profit margin and operating pre-tax margin, see IBM Form 10Q (page 62) submitted to the SEC on April 26, 2011.
IBM Corporation Key Segment Profiles
2011 Revenue Profile
2015 Roadmap
Global Services
Initiatives and Objectives
Revenue = $60.2B, +7% yr/yr (2% @cc)
Global Business Services
$19.3B, +6% yr/yr (1% @cc)
Global Technology Services
$40.9B, +7% yr/yr (3% @cc)
GBS Outsourcing
GTS Outsourcing
Global Business Services
• Align skills and capabilities with
IBM strategy to capture
high-growth markets
• Use standard, scalable intellectual
property to drive margin
expansion and client value
• Deliver margin expansion through:
- Operational Excellence
- Enterprise Productivity
- Optimized delivery
GBS C&SI
Global Technology Services
• Capture global demand driven by IT
complexity
- Growth Markets: infrastructure build-out
- Major Markets: high-value solutions
- Making markets in Security, Mobile, Big Data
• Leverage integrated delivery structure
to expand opportunity and margin
- Expand delivery footprint
- Infuse IBM Research
- Make the market for enterprise cloud
GTS Maintenance
GTS
Integrated
Technology
Services
Providing value through global reach, skills and technology-infused capabilities
Growth Markets continue to drive ~50% of incremental revenue by 2015
Operating Pre-tax income long-term growth model: 8% - 10%
Software
Initiatives and Objectives
Revenue = $24.9B, +11% yr/yr (8% @cc)
• Invest in higher value / higher growth areas to capture new market
opportunities
- Business Analytics and Optimization
- Smarter Planet
- Big Data
Other
Operating Systems
Branded Middleware
WebSphere
Information Mgmt
Tivoli
Lotus
Rational
Other Middleware
• Software enabled Cloud Computing
- Business Services
- Platform
- Infrastructure
• Acquire and integrate to extend capabilities
Revenue growth faster than the market
Contribute ~50% of IBM's segment profit by 2015
Operating Pre-tax income long-term growth model: 12% - 15%
Systems & Technology
Initiatives and Objectives
Revenue = $19.0B, 6% yr/yr (3% @cc)
• Differentiate through integration and optimization
- Workload optimized systems
- Integrated server, storage and network stacks
Retail Store Solutions *
Microelectronics OEM
Servers
Storage
System z
Power Systems
System x
• Deliver client value through expert integrated systems starting with
PureSystems
• Execute Go-To-Market strategy aligned with new offerings and routes
Sustained investments in innovation drive differentiation and value
Growth Markets to drive 40% of Revenue by 2015
Operating Pre-tax income long-term growth model: 6% - 8%
* Announced sale of Retail Store Solutions April 2012
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