IBM Corporation Financial Profile
Full Year 2015 Highlights*:
Jan 19, 2016
Continued strength in strategic imperatives; 2015 revenue of $29B up 26% Yr/Yr, represents 35% of IBM Revenue
- Cloud revenue of $10B, exited 4Q with an annual as-a-Service run rate of $5.3B
- Analytics revenue of $18B, up 16% for full year 2015
Expanded gross margins
Investing and adding capabilities
Expect 2016 Operating EPS of at least $13.50 and FCF conversion in the nineties
* All revenue growth @cc and adjusted for divested businesses
($ in Billions, except per share amounts)
($ in Billions)
P&L Highlights
FY
2014
(From Continuing Operations)
Revenue
$92.8
B/(W)
Yr/Yr
(1%)*
FY
2015
B/(W)
Yr/Yr
$81.7
(1%)*
Pre-Tax Income - Operating
$21.1
(4%)
$17.7
(16%)
Net Income - Operating
$16.7
(9%)
$14.7
(12%)
$16.53
(1%)
$14.92
(10%)
$12.4
(18%)
$13.1
6%
EPS (Diluted) - Operating
Free Cash Flow**
Balance Sheet
Assets
Cash & Marketable Securities
Global Financing Assets
Non-Global Financing Assets**
Liabilities
Global Financing Debt
Non-Global Financing Debt**
Other Liabilities
Equity
* @ constant currency & excluding divestited businesses
** Net Cash from Ops excl GF Receivables, less Capital Expenditures
Dec
2014*
Dec
2015
$8.5
$37.3
$71.5
$117.3
$8.2
$34.6
$67.7
$110.5
$29.1
$11.6
$64.5
$105.3
$27.2
$12.7
$56.2
$96.1
$12.0
$14.4
* Prior year reclassified for the adoption of the FASB guidance (Debt issuance cost and Deferred Tas classification)
** Includes eliminations of inter-company activity
Key P&L Metrics - Operating
(From Continuing Operations)
Gross Profit Margin
Expense / Revenue % *
Pre-Tax Income Margin
Tax Rate
Net Income Margin
FY
2014
B/(W)
Yr/Yr
FY
2015
B/(W)
Yr/Yr
50.6%
27.9%
22.8%
21.0%
18.0%
0.1 pts
0.2 pts
0.3 pts
4.0 pts
(0.7 pts)
50.8%
29.2%
21.6%
17.2%
17.9%
0.2 pts
(1.3 pts)
(1.1 pts)
3.8 pts
(0.1 pts)
Key Metrics
Non GF Debt/Cap
Global Financing Leverage
Dividend Yield
Credit Rating (Moody's, S&P)*
* Total Operating Expense & Other Income / Revenue
Dec
2014*
Dec
2015
59.2%
7.2
2.9%
Aa3, AA-
54.3%
7.3
4.3%
Aa3, AA-
* Credit ratings are not recommendations to purchase, hold, or sell any IBM securities or to make any investment decisions
2015
Revenue by Geography (excludes OEM)
2015*
Revenue by Business Segment
2015*
Pre-Tax (Operating) Profit by Business Segment
Systems &
Financing
Systems &
Financing
U.S.
37%
12%
Asia Pacific
Services
Can/ LA
21%
60%
15%
Services
39%
Software
Software
28%
10%
46%
EMEA
32%
* From Continuing Operations
Strategic Imperative
IBM/ Market Revenue Growth*
* Served market growth source: IBM Market Insights;
Historical Strategic Imperative Revenue measured on consistent basis;
Growth rates reflect constant/modeled currency excluding System x
Strategic Imperative Revenue Progression*
Strategic Imperative
2015 Portfolio Revenue Summary
Analytics
Cloud
Mobile
Security
Social
2015
$18B
10
3
2
1
Yr/Yr
16%
57%
250%
12%
21%
aaS-exit run rate
$5.3B
+$1.8B
* Revenue growth rates @ constant currency and excludes divested businesses
* Revenue growth rates @ constant currency and excludes divested businesses
Overlap in Strategic Imperatives primarily reflects solutions delivered via cloud
excluding System x
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 on a continuing operations basis. For reconciliation to GAAP and other information about
FY 2014 and FY 2015 revenue at constant currency excluding divestitures, operating gross profit margin, operating pre-tax income and margin, operating expense and other income, operating tax rate, operating net income and margin, operating earnings per share, free cash flow and the December 2014
and December 2015 non GF debt-to-capital ratio, see Non-GAAP Supplemental Materials and related information in the Forms 8-K submitted to the SEC on January 19, 2016. For reconciliation to GAAP and other information about 2011-2015 strategic imperatives revenue growth at constant currency
excluding divestitures, see Non-GAAP Supplemental Materials and related information in the Form 8-K submitted to the SEC on February 26, 2015 and January 19, 2016. For reconciliation to GAAP and other information about Analytics, Cloud, Mobil, Security and Social revenue growth at constant currency
excluding divestitures, see Non-GAAP Supplemental Materials and related information in the Form 8-K submitted to the SEC on January 19, 2016. For reconciliation to GAAP and other information about Expected 2016 Operating EPS, see Additional Information - 2016 Earnings Per Share in the Form 8-K
submitted to the SEC on January 20, 2016.