We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type |
---|---|---|---|
International Business Machines Corp | NYSE:IBM | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-1.83 | -1.08% | 167.08 | 167.87 | 165.73 | 167.50 | 8,983,798 | 01:00:00 |
Strong Performance by Red Hat Accelerates Cloud Revenue Growth
Highlights
Third Quarter:
2019 Full-year Expectations:
IBM (NYSE: IBM) today announced third-quarter results.
“In the third quarter, as we continued to help clients with their digital reinventions, we grew revenue in our Cloud & Cognitive Software segment and in Global Business Services," said Ginni Rometty, IBM chairman, president and chief executive officer. "Our results demonstrate that clients see IBM and Red Hat as a powerful combination and they trust us to provide them with the open hybrid cloud technology, innovation and industry expertise to help them shift their mission-critical workloads to the cloud.”
THIRD QUARTER 2019
Results Reflect the Impact of Items Related to
the Red Hat Acquisition Closed in July 2019
Pre-tax
Gross
Diluted
Net
Pre-tax
Income
Profit
EPS
Income
Income
Margin
Margin
GAAP from Continuing Operations
$
1.87
$
1.7B
$
1.5B
8.4
%
46.2
%
Year/Year
(36)
%
(38)
%
(49)
%
(7.5)
Pts
(0.7)
Pts
Operating (Non-GAAP)
$
2.68
$
2.4B
$
2.4B
13.3
%
47.4
%
Year/Year
(22)
%
(24)
%
(33)
%
(5.9)
Pts
(0.0)
Pts
“We continued our focus on the strength of our balance sheet in the third quarter," said James Kavanaugh, IBM senior vice president and chief financial officer. "We generated $12.3 billion in free cash flow over the last 12 months and with our disciplined financial management we reduced debt by nearly $7 billion in the quarter, while maintaining a strong cash balance.”
Cash Flow and Balance Sheet
In the third quarter, the company generated net cash from operating activities of $3.6 billion, or $2.5 billion excluding Global Financing receivables. IBM’s free cash flow was $1.8 billion. IBM returned $1.6 billion to shareholders through $1.4 billion in dividends and $0.1 billion in gross share repurchases. The company suspended its share repurchase program on July 9.
IBM ended the third quarter with $11.0 billion of cash on hand. Debt, including Global Financing debt of $23.1 billion, totaled $66.3 billion – down $6.7 billion since the end of the second quarter.
Segment Results for Third Quarter
Full-Year 2019 Expectations
On August 2, 2019, the company updated full-year expectations to reflect the impact of the Red Hat acquisition and related activities. IBM expects GAAP diluted earnings per share for the full year to be at least $10.58. The company continues to expect operating (non-GAAP) diluted earnings per share of at least $12.80. Operating (non-GAAP) diluted earnings per share exclude $2.22 per share of charges for: amortization of purchased intangible assets and other acquisition-related charges, including pre-closing charges, such as financing costs, associated with the Red Hat acquisition; retirement-related charges; and tax reform enactment impacts.
IBM continues to expect free cash flow of approximately $12 billion, with a realization rate over 100 percent of GAAP Net Income.
Year-To-Date 2019 Results
Year-to-date results reflect the impact of items related to the Red Hat acquisition closed in July 2019. Consolidated diluted earnings per share was $6.45 compared to $7.37, down 12 percent year to year. Consolidated net income was $5.8 billion, down 15 percent year to year. Revenues for the nine-month period ended September 30, 2019 totaled $55.4 billion, a decrease of 4 percent year to year (down 0.7 percent adjusting for divested businesses and currency) compared with $57.8 billion for the first nine months of 2018.
Operating (non-GAAP) diluted earnings per share from continuing operations was $8.10 compared with $8.96 per diluted share for the 2018 period, a decrease of 10 percent. Operating (non-GAAP) net income for the nine months ended September 30, 2019 was $7.2 billion compared with $8.2 billion in the prior-year period, a decrease of 12 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, but not limited to, 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; damage to the company’s reputation; 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 employees 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, including integration challenges, failure to achieve objectives, the assumption of liabilities, and higher debt levels; legal proceedings and investigatory risks; 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. Except as required by law, 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 —
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. EDT, today. The Webcast may be accessed via a link at http://www.ibm.com/investor/events/earnings/3q19.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
Nine Months Ended
September 30,
September 30,
2019
2018
2019
2018
REVENUE
Cloud & Cognitive Software
$
5,280
$
4,962
*
$
15,962
$
15,548
*
Global Business Services
4,117
4,076
*
12,391
12,326
*
Global Technology Services
6,700
7,101
*
20,412
21,846
*
Systems
1,481
1,736
4,562
5,412
Global Financing
343
388
1,100
1,188
Other
107
493
*
944
1,511
*
TOTAL REVENUE
18,028
18,756
55,370
57,830
GROSS PROFIT
8,336
8,803
25,388
26,249
GROSS PROFIT MARGIN
Cloud & Cognitive Software
74.1
%
76.1
%
*
75.5
%
76.8
%
*
Global Business Services
31.1
%
30.0
%
*
27.8
%
26.5
%
*
Global Technology Services
35.8
%
37.0
%
*
34.6
%
34.3
%
*
Systems
52.6
%
52.7
%
51.1
%
49.3
%
Global Financing
36.9
%
26.3
%
35.6
%
29.1
%
TOTAL GROSS PROFIT MARGIN
46.2
%
46.9
%
45.9
%
45.4
%
EXPENSE AND OTHER INCOME
S,G&A
5,024
4,363
15,171
14,665
R,D&E
1,553
1,252
4,393
4,021
Intellectual property and custom development income
(166)
(275)
(489)
(842)
Other (income) and expense
(31)
275
(850)
968
Interest expense
432
191
990
530
TOTAL EXPENSE AND OTHER INCOME
6,813
5,807
19,215
19,341
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES
1,522
2,996
6,173
6,908
Pre-tax margin
8.4
%
16.0
%
11.1
%
11.9
%
Provision for / (Benefit from) income taxes
(151)
304
407
138
Effective tax rate
(9.9)
%
10.2
%
6.6
%
2.0
%
INCOME FROM CONTINUING OPERATIONS
$
1,673
$
2,692
$
5,766
$
6,770
DISCONTINUED OPERATIONS
Income / (Loss) from discontinued operations, net of taxes
(1)
2
(5)
7
NET INCOME
$
1,672
$
2,694
$
5,761
$
6,777
EARNINGS / (LOSS) PER SHARE OF COMMON STOCK
Assuming Dilution
Continuing Operations
$
1.87
$
2.94
$
6.46
$
7.36
Discontinued Operations
$
0.00
$
0.00
$
(0.01)
$
0.01
TOTAL
$
1.87
$
2.94
$
6.45
$
7.37
Basic
Continuing Operations
$
1.89
$
2.95
$
6.50
$
7.39
Discontinued Operations
$
0.00
$
0.00
$
(0.01)
$
0.01
TOTAL
$
1.89
$
2.95
$
6.49
$
7.40
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (M’s)
Assuming Dilution
892.8
915.2
892.5
920.0
Basic
886.0
911.2
887.3
915.6
_________________________________
* Recast to conform with 2019 presentation.
INTERNATIONAL BUSINESS MACHINES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
At
At
September 30,
December 31,
(Dollars in Millions)
2019
2018
ASSETS:
Current Assets:
Cash and cash equivalents
$
10,087
$
11,379
Restricted cash
138
225
Marketable securities
733
618
Notes and accounts receivable - trade, net
6,753
7,432
Short-term financing receivables, net
12,330
22,388
Other accounts receivable, net
1,876
743
Inventories
1,712
1,682
Deferred costs
1,978
2,300
Prepaid expenses and other current assets
2,515
2,378
Total Current Assets
38,121
49,146
Property, plant and equipment, net
10,063
10,792
Operating right-of-use assets, net*
4,901
—
Long-term financing receivables, net
7,739
9,148
Prepaid pension assets
5,481
4,666
Deferred costs
2,535
2,676
Deferred taxes
4,994
5,216
Goodwill and intangibles, net
73,564
39,353
Investments and sundry assets
2,221
2,386
Total Assets
$
149,620
$
123,382
LIABILITIES:
Current Liabilities:
Taxes
$
2,154
$
3,046
Short-term debt
8,530
10,207
Accounts payable
4,042
6,558
Deferred income
11,223
11,165
Operating lease liabilities*
1,377
—
Other liabilities
7,739
7,251
Total Current Liabilities
35,066
38,227
Long-term debt
57,797
35,605
Retirement related obligations
15,925
17,002
Deferred income
3,382
3,445
Operating lease liabilities*
3,790
—
Other liabilities
15,564
12,174
Total Liabilities
131,524
106,452
EQUITY:
IBM Stockholders’ Equity:
Common stock
55,808
55,151
Retained earnings
160,709
159,206
Treasury stock — at cost
(169,474)
(168,071)
Accumulated other comprehensive income/(loss)
(29,086)
(29,490)
Total IBM Stockholders’ Equity
17,956
16,796
Noncontrolling interests
139
134
Total Equity
18,096
16,929
Total Liabilities and Equity
$
149,620
$
123,382
________________________
* Reflects the adoption of the FASB guidance on leases.
INTERNATIONAL BUSINESS MACHINES CORPORATION
CASH FLOW ANALYSIS
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
(Dollars in Millions)
2019
2018
2019
2018
Net Cash Provided by Operating Activities per GAAP:
$
3,619
$
4,232
$
11,319
$
11,128
Less: change in Global Financing (GF) Receivables
1,135
1,096
3,712
2,874
Capital Expenditures, Net
(681)
(942)
(1,725)
(2,839)
Free Cash Flow
1,803
2,194
5,882
5,415
Acquisitions
(32,587)
(1)
(32,630)
(123)
Divestitures
39
—
927
—
Dividends
(1,436)
(1,431)
(4,269)
(4,250)
Share Repurchase
(126)
(627)
(1,361)
(2,393)
Non-GF Debt
(4,967)
2,218
28,432
1,607
Other (includes GF Net Receivables and GF Debt)
1,823
382
1,755
1,564
Change in Cash, Cash Equivalents, Restricted Cash and Short-term Marketable Securities
$
(35,451)
$
2,736
$
(1,265)
$
1,820
INTERNATIONAL BUSINESS MACHINES CORPORATION
CASH FLOW
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
(Dollars in Millions)
2019
2018
2019
2018
Net Income from Operations
$
1,672
$
2,694
$
5,761
$
6,777
Depreciation/Amortization of Intangibles
1,669
1,138
4,409
3,368
Stock-based Compensation
220
129
468
371
Working Capital / Other
(1,077)
(825)
(3,031)
(2,261)
Global Financing A/R
1,135
1,096
3,712
2,874
Net Cash Provided by Operating Activities
$
3,619
$
4,232
$
11,319
$
11,128
Capital Expenditures, net of payments & proceeds
(681)
(942)
(1,725)
(2,839)
Divestitures, net of cash transferred
39
—
927
—
Acquisitions, net of cash acquired
(32,587)
(1)
(32,630)
(123)
Marketable Securities / Other Investments, net
2,856
(2,026)
6,365
(2,406)
Net Cash Provided by / (Used in) Investing Activities
$
(30,373)
$
(2,969)
$
(27,064)
$
(5,368)
Debt, net of payments & proceeds
(6,608)
1,595
20,465
845
Dividends
(1,436)
(1,431)
(4,269)
(4,250)
Common Stock Repurchases
(126)
(627)
(1,361)
(2,393)
Common Stock Transactions - Other
(7)
26
(118)
(66)
Net Cash Provided by / (Used in) Financing Activities
$
(8,177)
$
(437)
$
14,717
$
(5,864)
Effect of Exchange Rate changes on Cash
(378)
(55)
(352)
(399)
Net Change in Cash, Cash Equivalents and Restricted Cash
$
(35,310)
$
771
$
(1,379)
$
(503)
INTERNATIONAL BUSINESS MACHINES CORPORATION
SEGMENT DATA
(Unaudited)
Three Months Ended September 30, 2019
Cloud &
Global
Global
Cognitive
Business
Technology
Global
(Dollars in Millions)
Software
Services
Services
Systems
Financing
Revenue
External
$
5,280
$
4,117
$
6,700
$
1,481
$
343
Internal
686
70
287
195
302
Total Segment Revenue
$
5,966
$
4,187
$
6,988
$
1,676
$
645
Pre-tax Income / (Loss) from Continuing Operations
1,283
573
490
39
275
Pre-tax margin
21.5
%
13.7
%
7.0
%
2.3
%
42.6
%
Change YTY Revenue - External
6.4
%
1.0
%
(5.6)
%
(14.7)
%
(11.7)
%
Change YTY Revenue - External @constant currency
7.8
%
2.2
%
(4.1)
%
(13.8)
%
(10.7)
%
Three Months Ended September 30, 2018
Cloud &
Global
Global
Cognitive
Business
Technology
Global
(Dollars in Millions)
Software*
Services*
Services*
Systems
Financing
Revenue
External
$
4,962
$
4,076
$
7,101
$
1,736
$
388
Internal
777
77
279
181
338
Total Segment Revenue
$
5,738
$
4,153
$
7,380
$
1,917
$
726
Pre-tax Income / (Loss) from Continuing Operations
2,050
566
607
209
308
Pre-tax margin
35.7
%
13.6
%
8.2
%
10.9
%
42.5
%
______________________
* Recast to conform with 2019 presentation.
INTERNATIONAL BUSINESS MACHINES CORPORATION
SEGMENT DATA
(Unaudited)
Nine Months Ended September 30, 2019
Cloud &
Global
Global
Cognitive
Business
Technology
Global
(Dollars in Millions)
Software
Services
Services
Systems
Financing
Revenue
External
$
15,962
$
12,391
$
20,412
$
4,562
$
1,100
Internal
2,135
213
879
528
884
Total Segment Revenue
$
18,097
$
12,604
$
21,291
$
5,091
$
1,983
Pre-tax Income / (Loss) from Continuing Operations
5,052
1,188
1,000
(101)
803
Pre-tax margin
27.9
%
9.4
%
4.7
%
(2.0)
%
40.5
%
Change YTY Revenue - External
2.7
%
0.5
%
(6.6)
%
(15.7)
%
(7.4)
%
Change YTY Revenue - External @constant currency
4.9
%
3.3
%
(3.6)
%
(14.1)
%
(5.0)
%
Nine Months Ended September 30, 2018
Cloud &
Global
Global
Cognitive
Business
Technology
Global
(Dollars in Millions)
Software*
Services*
Services*
Systems
Financing
Revenue
External
$
15,548
$
12,326
$
21,846
$
5,412
$
1,188
Internal
2,518
249
589
576
1,240
Total Segment Revenue
$
18,066
$
12,575
$
22,435
$
5,989
$
2,428
Pre-tax Income / (Loss) from Continuing Operations
5,760
1,063
1,124
352
1,042
Pre-tax margin
31.9
%
8.5
%
5.0
%
5.9
%
42.9
%
___________________
* Recast to conform with 2019 presentation.
INTERNATIONAL BUSINESS MACHINES CORPORATION
U.S. GAAP TO OPERATING (Non-GAAP) RESULTS RECONCILIATION
(Unaudited; Dollars in millions except per share amounts)
Three Months Ended September 30, 2019
Continuing Operations
Acquisition-
Retirement-
Tax
Related
Related
Reform
Operating
GAAP
Adjustments*
Adjustments**
Impacts
(Non-GAAP)
Gross Profit
$
8,336
$
209
—
—
$
8,545
Gross Profit Margin
46.2
%
1.2
Pts
—
—
47.4
%
S,G&A
5,024
(451)
—
—
4,573
R,D&E
1,553
(53)
—
—
1,500
Other (Income) & Expense
(31)
10
(145)
—
(166)
Interest Expense
432
(24)
—
—
408
Total Expense & Other (Income)
6,813
(518)
(145)
—
6,150
Pre-tax Income from Continuing Operations
1,522
727
145
—
2,395
Pre-tax Income Margin from Continuing Operations
8.4
%
4.0
Pts
0.8
Pts
—
13.3
%
Provision for / (Benefit from) Income Taxes***
(151)
142
16
(5)
1
Effective Tax Rate
(9.9)
%
8.9
Pts
1.3
Pts
(0.2)
Pts
0.1
%
Income from Continuing Operations
1,673
586
130
5
2,394
Income Margin from Continuing Operations
9.3
%
3.3
Pts
0.7
Pts
0.0
Pts
13.3
%
Diluted Earnings / (Loss) Per Share: Continuing Operations
$
1.87
$
0.66
$
0.14
$
0.01
$
2.68
Three Months Ended September 30, 2018
Continuing Operations
Acquisition-
Retirement-
Tax
Related
Related
Reform
Operating
GAAP
Adjustments*
Adjustments**
Impacts
(Non-GAAP)
Gross Profit
$
8,803
$
96
—
—
$
8,899
Gross Profit Margin
46.9
%
0.5
Pts
—
—
47.4
%
S,G&A
4,363
(112)
—
—
4,251
R,D&E
1,252
—
—
—
1,252
Other (Income) & Expense
275
(1)
(389)
—
(115)
Interest Expense
191
—
—
—
191
Total Expense & Other (Income)
5,807
(113)
(389)
—
5,304
Pre-tax Income from Continuing Operations
2,996
209
389
—
3,594
Pre-tax Income Margin from Continuing Operations
16.0
%
1.1
Pts
2.1
Pts
—
19.2
%
Provision for / (Benefit from) Income Taxes***
304
56
100
—
460
Effective Tax Rate
10.2
%
1.0
Pts
1.7
Pts
—
Pts
12.8
%
Income from Continuing Operations
2,692
153
289
—
3,134
Income Margin from Continuing Operations
14.4
%
0.8
Pts
1.5
Pts
—
Pts
16.7
%
Diluted Earnings / (Loss) Per Share: Continuing Operations
$
2.94
$
0.17
$
0.31
$
—
$
3.42
______________________________
* Includes amortization of purchased intangible assets, in process R&D, transaction costs, applicable restructuring and related expenses, tax charges related to acquisition integration and pre-closing charges, such as financing costs.
** Includes amortization of prior service costs, interest cost, expected return on plan assets, amortized actuarial gains/losses, the impacts of any plan curtailments/settlements and pension insolvency costs and other costs.
*** 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)
Nine Months Ended September 30, 2019
Continuing Operations
Acquisition-
Retirement-
Tax
Related
Related
Reform
Operating
GAAP
Adjustments*
Adjustments**
Impacts
(Non-GAAP)
Gross Profit
$
25,388
$
359
—
—
$
25,747
Gross Profit Margin
45.9
%
0.6
Pts
—
—
46.5
%
S,G&A
15,171
(724)
—
—
14,447
R,D&E
4,393
(53)
—
—
4,340
Other (Income) & Expense
(850)
152
(419)
—
(1,118)
Interest Expense
990
(228)
—
—
762
Total Expense & Other (Income)
19,215
(853)
(419)
—
17,942
Pre-tax Income from Continuing Operations
6,173
1,212
419
—
7,805
Pre-tax Income Margin from Continuing Operations
11.1
%
2.2
Pts
0.8
Pts
—
14.1
%
Provision for / (Benefit from) Income Taxes***
407
245
82
(160)
575
Effective Tax Rate
6.6
%
2.1
Pts
0.7
Pts
(2.0)
Pts
7.4
%
Income from Continuing Operations
5,766
967
338
160
7,230
Income Margin from Continuing Operations
10.4
%
1.7
Pts
0.6
Pts
0.3
Pts
13.1
%
Diluted Earnings / (Loss) Per Share: Continuing Operations
$
6.46
$
1.08
$
0.38
$
0.18
$
8.10
Nine Months Ended September 30, 2018
Continuing Operations
Acquisition-
Retirement-
Tax
Related
Related
Reform
Operating
GAAP
Adjustments*
Adjustments**
Impacts
(Non-GAAP)
Gross Profit
$
26,249
$
283
—
—
$
26,531
Gross Profit Margin
45.4
%
0.5
Pts
—
—
45.9
%
S,G&A
14,665
(332)
—
—
14,333
R,D&E
4,021
—
—
—
4,021
Other (Income) & Expense
968
(1)
(1,185)
—
(219)
Interest Expense
530
—
—
—
530
Total Expense & Other (Income)
19,341
(333)
(1,185)
—
17,822
Pre-tax Income from Continuing Operations
6,908
616
1,185
—
8,709
Pre-tax Income Margin from Continuing Operations
11.9
%
1.1
Pts
2.0
Pts
—
15.1
%
Provision for / (Benefit from) Income Taxes***
138
138
285
(93)
468
Effective Tax Rate
2.0
%
1.4
Pts
3.0
Pts
(1.1)
Pts
5.4
%
Income from Continuing Operations
6,770
478
900
93
8,241
Income Margin from Continuing Operations
11.7
%
0.8
Pts
1.6
Pts
0.2
Pts
14.2
%
Diluted Earnings / (Loss) Per Share: Continuing Operations
$
7.36
$
0.52
$
0.98
$
0.10
$
8.96
______________________________ * Includes amortization of purchased intangible assets, in process R&D, transaction costs, applicable restructuring and related expenses, tax charges related to acquisition integration and pre-closing charges, such as financing costs. ** Includes amortization of prior service costs, interest cost, expected return on plan assets, amortized actuarial gains/losses, the impacts of any plan curtailments/settlements and pension insolvency costs and other costs. *** 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)
Three Months Ended
Nine Months Ended
September 30, 2019
September 30, 2019
Change YTY
Change YTY
Revenue Adjusting for Divested Businesses and Currency
Cloud
Total IBM
Total IBM
Revenue as reported
10.6
%
(3.9)
%
(4.3)
%
Impact from divested businesses
1.8
Pts
2.0
Pts
0.9
Pts
Currency impact
1.5
Pts
1.3
Pts
2.6
Pts
Revenue adjusting for divested businesses and currency (non-GAAP)
13.9
%
(0.6)
%
(0.7)
%
Three Months Ended
Change
Revenue for Red Hat, Normalized for Historical Comparability
September 30, 2019
September 30, 2018
YTY
YTY @constant currency
Red Hat revenue as reported in IBM consolidated results (1)
$
371
$
—
Add: Red Hat revenue prior to acquisition (2)
84
829
Add: Purchase accounting deferred revenue and intercompany adjustments (3)
531
—
Red Hat revenue, normalized for historical comparability (non-GAAP)
$
987
$
829
19
%
20
%
(1) Represents GAAP revenue as reported by IBM, which is included in the Cloud & Cognitive Software segment. (2) Red Hat revenue was included in IBM's consolidated results beginning on July 9, 2019. Revenue for July 1 - July 8, 2019 and the three months ended September 30, 2018 represents pre-acquisition Red Hat standalone revenue and is included for comparative purposes. (3) Represents the third-quarter 2019 impact of the deferred revenue purchase accounting adjustment and adjustments to add back revenue which was eliminated for sales between Red Hat and IBM. This line represents revenue that would have been recognized by Red Hat under GAAP if the acquisition had not occurred, but was not recognized by IBM due to purchase accounting and intercompany adjustments.
2019 Full Year Expectations
(as of third quarter 2019)
GAAP Diluted EPS
at least $10.58
Operating EPS (non-GAAP)
at least $12.80
Adjustments
Acquisition-related Charges *
$
1.52
Non-Operating Retirement-Related Items
$
0.51
Tax Reform Enactment Impacts
$
0.19
______________________________
* Includes acquisitions as of September 30, 2019.
View source version on businesswire.com: https://www.businesswire.com/news/home/20191016005883/en/
IBM Edward Barbini, 914‑499‑6565 barbini@us.ibm.com John Bukovinsky, 732‑618‑3531 jbuko@us.ibm.com
1 Year International Business M... Chart |
1 Month International Business M... Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions