IBM RELEASES FIRST QUARTER RESULTS
Double-Digit Software and Consulting
Growth Led by Hybrid Cloud Adoption; Strong Profit Generation
ARMONK, N.Y., April 19, 2022 -- IBM (NYSE: IBM) today
announced first-quarter 2022 earnings results.
"Demand for hybrid cloud and AI drove growth in both Software
and Consulting in the first quarter. Today we're a more focused
business and our results reflect the execution of our strategy,"
said Arvind Krishna, IBM chairman
and chief executive officer. "We are off to a solid start for the
year, and we now see revenue growth for 2022 at the high end of our
model."
First-Quarter Highlights
- Revenue
- Revenue of $14.2 billion, up 8
percent, up 11 percent at constant currency (over 5 points from
incremental sales to Kyndryl)
- Software revenue up 12 percent, up 15 percent at constant
currency (over 8 points from incremental sales to Kyndryl)
- Consulting revenue up 13 percent, up 17 percent at constant
currency
- Infrastructure revenue down 2 percent, flat at constant
currency (over 8 points from incremental sales to Kyndryl)
- Hybrid cloud revenue:
-- First Quarter: $5.0
billion, up 14 percent, up 17 percent at constant
currency
-- Last 12 months: $20.8
billion, up 17 percent
- Free Cash Flow
- On a consolidated basis, net cash from operating activities
of $3.2 billion; free cash flow of
$1.2 billion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST QUARTER 2022
INCOME STATEMENT SUMMARY |
|
|
|
|
|
|
|
|
|
|
|
Pre-tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross |
|
|
Pre-tax |
|
Income |
|
|
Net |
|
|
Diluted |
|
|
|
|
Revenue |
|
|
Profit |
|
|
Income |
|
Margin |
|
|
Income |
|
|
EPS |
|
GAAP from
Continuing
Operations |
|
$ |
14.2B |
|
$ |
7.3B |
|
$ |
0.6B |
|
4.4 |
% |
$ |
0.7B |
|
$ |
0.73 |
|
| Year/Year |
|
|
8 |
%* |
|
4 |
% |
|
156 |
% |
2.5 |
Pts |
|
64 |
% |
|
62 |
% |
Operating
(Non-GAAP) |
|
|
|
|
$ |
7.5B |
|
$ |
1.5B |
|
10.7 |
% |
$ |
1.3B |
|
$ |
1.40 |
|
| Year/Year |
|
|
|
|
|
4 |
% |
|
46 |
% |
2.8 |
Pts |
|
25 |
% |
|
25 |
% |
| * 11% at constant currency |
"In the first quarter we continued to strengthen the
fundamentals of our business, consistent with our medium-term
model," said James Kavanaugh, IBM
senior vice president and chief financial officer. "We are a faster
growing, more profitable company with a higher-value business mix,
a significant recurring revenue base and strong cash
generation."
Segment Results for First Quarter
- Software (includes Hybrid Platform & Solutions,
Transaction Processing)— revenues of $5.8 billion, up 12.3 percent, up 15.4 percent at
constant currency (over 8 points from incremental sales to
Kyndryl):
- Hybrid Platform & Solutions up 7 percent, up 10 percent
at constant currency (about 1.5 points from incremental sales
to Kyndryl):
-- Red Hat up 18 percent, up 21 percent at
constant currency
-- Automation up 3 percent, up 5 percent at
constant currency
-- Data & AI up 2 percent, up 4 percent at
constant currency
-- Security up 5 percent, up 8 percent at
constant currency
- Transaction Processing up 26 percent, up 31 percent at
constant currency (about 28 points from incremental sales to
Kyndryl)
- Software segment hybrid cloud revenue up 22 percent, up 25
percent at constant currency
- Consulting (includes Business Transformation, Technology
Consulting and Application Operations)— revenues of
$4.8 billion, up 13.3 percent, up
17.4 percent at constant currency:
- Business Transformation up 15 percent, up 19 percent at
constant currency
- Technology Consulting up 14 percent, up 19 percent at
constant currency
- Application Operations up 10 percent, up 14 percent at
constant currency
- Consulting segment hybrid cloud revenue up 24 percent, up 29
percent at constant currency
- Infrastructure (includes Hybrid Infrastructure,
Infrastructure Support)— revenues of $3.2 billion, down 2.3 percent, up 0.3 percent at
constant currency (over 8 points from incremental sales to
Kyndryl):
- Hybrid Infrastructure down 5 percent, down 2 percent at
constant currency (over 8 points from incremental sales to
Kyndryl)
-- IBM z Systems down 19 percent, down 18 percent
at constant currency
-- Distributed Infrastructure up 5 percent, up 8
percent at constant currency
- Infrastructure Support flat, up 4 percent at constant
currency (over 8 points from incremental sales to Kyndryl)
- Infrastructure segment hybrid cloud revenue down 20 percent, down
18 percent at constant currency
- Financing (includes client and commercial
financing)— revenues of $0.2
billion, down 26.2 percent, down 24.5 percent at constant
currency
Cash Flow and Balance Sheet
On a consolidated basis, in the first quarter, the company
generated net cash from operating activities of $3.2 billion or $1.6
billion excluding IBM Financing receivables. IBM's free cash
flow was $1.2 billion, which includes
cash impacts from the company's structural actions initiated at the
end of 2020.
IBM ended the first quarter with $10.8
billion of cash on hand (which includes marketable
securities), up $3.2 billion from
year-end 2021. Debt, including IBM Financing debt of $12.2 billion, totaled $54.2 billion, up $2.5
billion since the end of 2021. The company returned
$1.5 billion to shareholders in
dividends in the first quarter.
Full-Year 2022 Expectations
- Revenue growth: The company now expects constant currency
revenue growth at the high end of the mid-single digit range. The
company also expects an additional 3.5 point contribution from
incremental sales to Kyndryl. At mid-April
2022 foreign exchange rates, currency is expected to be a
three to four point headwind.
- Free Cash Flow: The company continues to expect $10 billion to $10.5
billion in consolidated free cash flow.
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; 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; 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; fluctuations in financial results; impact of local legal,
economic, political, health and other conditions; the company's
failure to meet growth and productivity objectives; ineffective
internal controls; the company's use of accounting estimates;
impairment of the company's goodwill or amortizable intangible
assets; 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; reliance on third party distribution
channels and ecosystems; cybersecurity and data privacy
considerations; adverse effects related to climate change and
environmental matters, tax matters; legal proceedings and
investigatory risks; the company's pension plans; currency
fluctuations and customer financing risks; impact of changes in
market liquidity conditions and customer credit risk on
receivables; potential failure of the separation of Kyndryl
Holdings, Inc. to qualify for tax-free treatment; 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 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
On November 3, 2021, IBM completed
the separation of Kyndryl. Unless otherwise specified, results are
presented on a continuing operations basis.
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 —
- adjusting for currency (i.e., at constant currency);
- presenting operating (non-GAAP) earnings per share amounts and
related income statement items;
- consolidated free cash flow;
- consolidated cash from operating activities excluding IBM
Financing receivables;
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 https://www.ibm.com/investor/events/earnings-1q22. 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).
Contact: IBM
Sarah Meron, 347 891 1770
sarah.meron@ibm.com
Tim Davidson, 914 844
7847
tfdavids@us.ibm.com
INTERNATIONAL
BUSINESS MACHINES CORPORATION
COMPARATIVE FINANCIAL RESULTS
(Unaudited; Dollars in millions except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
|
|
March 31, |
|
|
|
|
2022 |
|
2021* |
|
|
| REVENUE |
|
|
|
|
|
|
|
|
| Software |
|
$ |
5,772 |
|
$ |
5,138 |
|
|
| Consulting |
|
|
4,829 |
|
|
4,262 |
|
|
| Infrastructure |
|
|
3,219 |
|
|
3,293 |
|
|
| Financing |
|
|
154 |
|
|
208 |
|
|
| Other |
|
|
224 |
|
|
284 |
|
|
| TOTAL REVENUE |
|
|
14,197 |
|
|
13,187 |
|
|
|
|
|
|
|
|
|
|
|
| GROSS PROFIT |
|
|
7,335 |
|
|
7,027 |
|
|
|
|
|
|
|
|
|
|
|
| GROSS PROFIT MARGIN |
|
|
|
|
|
|
|
|
| Software |
|
|
78.8 |
% |
|
77.8 |
% |
|
| Consulting |
|
|
24.3 |
% |
|
27.8 |
% |
|
| Infrastructure |
|
|
50.5 |
% |
|
56.3 |
% |
|
| Financing |
|
|
37.7 |
% |
|
35.5 |
% |
|
|
|
|
|
|
|
|
|
|
| TOTAL GROSS PROFIT MARGIN |
|
|
51.7 |
% |
|
53.3 |
% |
|
|
|
|
|
|
|
|
|
|
| EXPENSE AND OTHER INCOME |
|
|
|
|
|
|
|
|
| S,G&A |
|
|
4,597 |
|
|
4,688 |
|
|
| R,D&E |
|
|
1,679 |
|
|
1,616 |
|
|
| Intellectual property and custom development
income |
|
|
(121) |
|
|
(146) |
|
|
| Other (income) and expense |
|
|
246 |
|
|
346 |
|
|
| Interest expense |
|
|
311 |
|
|
280 |
|
|
| TOTAL EXPENSE AND OTHER INCOME |
|
|
6,712 |
|
|
6,784 |
|
|
|
|
|
|
|
|
|
|
|
| INCOME/(LOSS) FROM CONTINUING
OPERATIONS |
|
|
|
|
|
|
|
|
| BEFORE INCOME TAXES |
|
|
623 |
|
|
244 |
|
|
| Pre-tax margin |
|
|
4.4 |
% |
|
1.8 |
% |
|
| Provision for/(Benefit from) income taxes |
|
|
(39) |
|
|
(160) |
|
|
| Effective tax rate |
|
|
(6.3) |
% |
|
(65.5) |
% |
|
|
|
|
|
|
|
|
|
|
| INCOME FROM CONTINUING OPERATIONS |
|
$ |
662 |
|
$ |
403 |
|
|
|
|
|
|
|
|
|
|
|
| DISCONTINUED OPERATIONS |
|
|
|
|
|
|
|
|
| Income/(Loss) from discontinued operations, net of
taxes |
|
|
71 |
|
|
552 |
|
|
|
|
|
|
|
|
|
|
|
| NET INCOME |
|
$ |
733 |
|
$ |
955 |
|
|
|
|
|
|
|
|
|
|
|
| EARNINGS/(LOSS) PER SHARE OF COMMON
STOCK |
|
|
|
|
|
|
|
|
| Assuming Dilution |
|
|
|
|
|
|
|
|
| Continuing Operations |
|
$ |
0.73 |
|
$ |
0.45 |
|
|
| Discontinued Operations |
|
$ |
0.08 |
|
$ |
0.61 |
|
|
| TOTAL |
|
$ |
0.81 |
|
$ |
1.06 |
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
|
|
|
|
|
|
|
| Continuing Operations |
|
$ |
0.74 |
|
$ |
0.45 |
|
|
| Discontinued Operations |
|
$ |
0.08 |
|
$ |
0.62 |
|
|
| TOTAL |
|
$ |
0.82 |
|
$ |
1.07 |
|
|
|
|
|
|
|
|
|
|
|
| WEIGHTED-AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING (M's) |
|
|
|
|
|
|
|
|
| Assuming Dilution |
|
|
909.2 |
|
|
901.7 |
|
|
| Basic |
|
|
899.3 |
|
|
893.6 |
|
|
____________________
* Recast to conform with 2022 presentation. |
|
INTERNATIONAL
BUSINESS MACHINES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited) |
|
|
|
At |
|
At |
|
|
March 31, |
|
December 31, |
| (Dollars in Millions) |
|
2022 |
|
2021 |
| ASSETS: |
|
|
|
|
|
|
| Current Assets: |
|
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
9,934 |
|
$ |
6,650 |
| Restricted cash |
|
|
286 |
|
|
307 |
| Marketable securities |
|
|
550 |
|
|
600 |
| Notes and accounts receivable - trade,
net |
|
|
5,963 |
|
|
6,754 |
| Short-term financing receivables, net |
|
|
7,169 |
|
|
8,014 |
| Other accounts receivable, net |
|
|
1,003 |
|
|
1,002 |
| Inventories |
|
|
1,776 |
|
|
1,649 |
| Deferred costs |
|
|
1,103 |
|
|
1,097 |
| Prepaid expenses and other current assets |
|
|
3,548 |
|
|
3,466 |
| Total Current Assets |
|
|
31,330 |
|
|
29,539 |
|
|
|
|
|
|
|
| Property, plant and equipment, net |
|
|
5,559 |
|
|
5,694 |
| Operating right-of-use assets, net |
|
|
3,108 |
|
|
3,222 |
| Long-term financing receivables, net |
|
|
4,610 |
|
|
5,425 |
| Prepaid pension assets |
|
|
9,995 |
|
|
9,850 |
| Deferred costs |
|
|
916 |
|
|
924 |
| Deferred taxes |
|
|
7,567 |
|
|
7,370 |
| Goodwill |
|
|
56,106 |
|
|
55,643 |
| Intangibles, net |
|
|
12,312 |
|
|
12,511 |
| Investments and sundry assets |
|
|
1,771 |
|
|
1,823 |
| Total Assets |
|
$ |
133,275 |
|
$ |
132,001 |
|
|
|
|
|
|
|
| LIABILITIES: |
|
|
|
|
|
|
| Current Liabilities: |
|
|
|
|
|
|
| Taxes |
|
$ |
1,798 |
|
$ |
2,289 |
| Short-term debt |
|
|
7,690 |
|
|
6,787 |
| Accounts payable |
|
|
3,453 |
|
|
3,955 |
| Deferred income |
|
|
13,526 |
|
|
12,518 |
| Operating lease liabilities |
|
|
954 |
|
|
974 |
| Other liabilities |
|
|
6,635 |
|
|
7,097 |
| Total Current Liabilities |
|
|
34,056 |
|
|
33,619 |
|
|
|
|
|
|
|
| Long-term debt |
|
|
46,545 |
|
|
44,917 |
| Retirement related obligations |
|
|
13,937 |
|
|
14,435 |
| Deferred income |
|
|
3,423 |
|
|
3,577 |
| Operating lease liabilities |
|
|
2,358 |
|
|
2,462 |
| Other liabilities |
|
|
13,844 |
|
|
13,996 |
| Total Liabilities |
|
|
114,162 |
|
|
113,005 |
|
|
|
|
|
|
|
| EQUITY: |
|
|
|
|
|
|
| IBM Stockholders' Equity: |
|
|
|
|
|
|
| Common stock |
|
|
57,603 |
|
|
57,319 |
| Retained earnings |
|
|
153,401 |
|
|
154,209 |
| Treasury stock — at cost |
|
|
(169,422) |
|
|
(169,392) |
| Accumulated other comprehensive income/(loss) |
|
|
(22,532) |
|
|
(23,234) |
| Total IBM Stockholders' Equity |
|
|
19,050 |
|
|
18,901 |
|
|
|
|
|
|
|
| Noncontrolling interests |
|
|
62 |
|
|
95 |
| Total Equity |
|
|
19,112 |
|
|
18,996 |
|
|
|
|
|
|
|
| Total Liabilities and Equity |
|
$ |
133,275 |
|
$ |
132,001 |
INTERNATIONAL BUSINESS MACHINES CORPORATION
CASH FLOW ANALYSIS
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
March 31, |
| (Dollars in Millions) |
|
2022 |
|
2021 |
| Consolidated Net Cash from Operations per
GAAP |
|
$ |
3,248 |
|
$ |
4,914 |
|
|
|
|
|
|
|
| Less: change in IBM Financing receivables |
|
|
1,631 |
|
|
2,863 |
| Capital Expenditures, net |
|
|
(378) |
|
|
(529) |
|
|
|
|
|
|
|
| Consolidated Free Cash Flow |
|
|
1,240 |
|
|
1,522 |
|
|
|
|
|
|
|
| Acquisitions |
|
|
(698) |
|
|
(1,120) |
| Divestitures |
|
|
61 |
|
|
(15) |
| Dividends |
|
|
(1,475) |
|
|
(1,457) |
| Non-Financing Debt |
|
|
4,675 |
|
|
(1,725) |
| Other (includes IBM Financing net receivables and
debt) |
|
|
(590) |
|
|
(207) |
|
|
|
|
|
|
|
| Change in Cash, Cash Equivalents, Restricted
Cash and Short-term Marketable Securities* |
|
$ |
3,213 |
|
$ |
(3,002) |
____________________
* Cash flows are presented on a consolidated basis. |
INTERNATIONAL
BUSINESS MACHINES CORPORATION
CASH FLOW
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
|
March 31, |
|
| (Dollars in Millions) |
|
2022 |
|
2021 |
|
| Net Income from Operations |
|
$ |
733 |
|
$ |
955 |
|
| Depreciation/Amortization of Intangibles |
|
|
1,257 |
|
|
1,672 |
|
| Stock-based Compensation |
|
|
234 |
|
|
213 |
|
| Working Capital / Other |
|
|
(606) |
|
|
(789) |
|
| IBM Financing A/R |
|
|
1,631 |
|
|
2,863 |
|
| Net Cash Provided by Operating
Activities |
|
$ |
3,248 |
|
$ |
4,914 |
|
| Capital Expenditures, net of payments &
proceeds |
|
|
(378) |
|
|
(529) |
|
| Divestitures, net of cash transferred |
|
|
61 |
|
|
(15) |
|
| Acquisitions, net of cash acquired |
|
|
(698) |
|
|
(1,120) |
|
| Marketable Securities / Other Investments,
net |
|
|
(344) |
|
|
(335) |
|
| Net Cash Provided by/(Used in) Investing
Activities |
|
$ |
(1,358) |
|
$ |
(2,000) |
|
| Debt, net of payments & proceeds |
|
|
2,948 |
|
|
(4,299) |
|
| Dividends |
|
|
(1,475) |
|
|
(1,457) |
|
| Financing - Other |
|
|
(95) |
|
|
(26) |
|
| Net Cash Provided by/(Used in) Financing
Activities |
|
$ |
1,377 |
|
$ |
(5,783) |
|
| Effect of Exchange Rate changes on Cash |
|
|
(5) |
|
|
(134) |
|
| Net Change in Cash, Cash Equivalents and
Restricted Cash* |
|
$ |
3,263 |
|
$ |
(3,002) |
|
____________________
* Cash flows are presented on a consolidated basis. |
|
INTERNATIONAL
BUSINESS MACHINES CORPORATION
SEGMENT DATA
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
| (Dollars in Millions) |
|
Software |
|
Consulting |
|
Infrastructure |
|
Financing |
|
| Revenue |
|
$ |
5,772 |
|
$ |
4,829 |
|
$ |
3,219 |
|
$ |
154 |
|
| Pre-tax Income/(Loss) from Continuing
Operations |
|
|
1,134 |
|
|
348 |
|
|
199 |
|
|
84 |
|
| Pre-tax Margin |
|
|
19.7 |
% |
|
7.2 |
% |
|
6.2 |
% |
|
54.6 |
% |
| Change YTY Revenue |
|
|
12.3 |
% |
|
13.3 |
% |
|
(2.3) |
% |
|
(26.2) |
% |
| Change YTY Revenue -
constant currency |
|
|
15.4 |
% |
|
17.4 |
% |
|
0.3 |
% |
|
(24.5) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2021* |
|
|
|
|
|
|
|
|
|
|
|
|
| (Dollars in Millions) |
|
Software |
|
Consulting |
|
Infrastructure |
|
Financing |
|
| Revenue |
|
$ |
5,138 |
|
$ |
4,262 |
|
$ |
3,293 |
|
$ |
208 |
|
| Pre-tax Income/(Loss) from Continuing
Operations |
|
|
658 |
|
|
277 |
|
|
292 |
|
|
98 |
|
| Pre-tax Margin |
|
|
12.8 |
% |
|
6.5 |
% |
|
8.9 |
% |
|
47.0 |
% |
____________________
* Recast to conform with 2022 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
March 31, 2022 |
|
|
|
Continuing Operations |
|
|
|
|
|
|
Acquisition- |
|
Retirement- |
|
Tax |
|
Kyndryl- |
|
|
|
|
|
|
|
|
|
Related |
|
Related |
|
Reform |
|
Related |
|
Operating |
|
|
|
GAAP |
|
Adjustments (1) |
|
Adjustments (2) |
|
Impacts |
|
Impacts (3) |
|
(Non-GAAP) |
|
| Gross Profit |
|
$ |
7,335 |
|
$ |
181 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
7,516 |
|
| Gross Profit Margin |
|
|
51.7 |
% |
|
1.3 |
pts. |
|
— |
pts. |
|
— |
pts. |
|
— |
pts. |
|
52.9 |
% |
| S,G&A |
|
$ |
4,597 |
|
$ |
(286) |
|
$ |
— |
|
$ |
— |
|
$ |
(0) |
|
$ |
4,311 |
|
| Other (Income) & Expense |
|
|
246 |
|
|
(1) |
|
|
(202) |
|
|
— |
|
|
(222) |
|
|
(179) |
|
| Total Expense & Other (Income) |
|
|
6,712 |
|
|
(287) |
|
|
(202) |
|
|
— |
|
|
(222) |
|
|
6,001 |
|
Pre-tax Income from Continuing
Operations |
|
|
623 |
|
|
468 |
|
|
202 |
|
|
— |
|
|
222 |
|
|
1,515 |
|
Pre-tax Income Margin from
Continuing Operations |
|
|
4.4 |
% |
|
3.3 |
pts. |
|
1.4 |
pts. |
|
— |
pts. |
|
1.6 |
pts. |
|
10.7 |
% |
Provision for/(Benefit from) Income
Taxes (4) |
|
$ |
(39) |
|
$ |
109 |
|
$ |
58 |
|
$ |
116 |
|
$ |
— |
|
$ |
244 |
|
| Effective Tax Rate |
|
|
(6.3) |
% |
|
9.1 |
pts. |
|
4.6 |
pts. |
|
7.7 |
pts. |
|
0.9 |
pts. |
|
16.1 |
% |
| Income from Continuing Operations |
|
$ |
662 |
|
$ |
359 |
|
$ |
144 |
|
$ |
(116) |
|
$ |
222 |
|
$ |
1,271 |
|
Income Margin from Continuing
Operations |
|
|
4.7 |
% |
|
2.5 |
pts. |
|
1.0 |
pts. |
|
(0.8) |
pts. |
|
1.6 |
pts. |
|
9.0 |
% |
Diluted Earnings/(Loss) Per Share:
Continuing Operations |
|
$ |
0.73 |
|
$ |
0.39 |
|
$ |
0.16 |
|
$ |
(0.13) |
|
$ |
0.24 |
|
$ |
1.40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2021 |
|
|
|
Continuing Operations |
|
|
|
|
|
|
Acquisition- |
|
Retirement- |
|
Tax |
|
Kyndryl- |
|
|
|
|
|
|
|
|
|
Related |
|
Related |
|
Reform |
|
Related |
|
Operating |
|
|
|
GAAP |
|
Adjustments (1) |
|
Adjustments (2) |
|
Impacts |
|
Impacts (3) |
|
(Non-GAAP) |
|
| Gross Profit |
|
$ |
7,027 |
|
$ |
174 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
7,201 |
|
| Gross Profit Margin |
|
|
53.3 |
% |
|
1.3 |
pts. |
|
— |
pts. |
|
— |
pts. |
|
— |
pts. |
|
54.6 |
% |
| S,G&A |
|
$ |
4,688 |
|
$ |
(288) |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
4,399 |
|
| Other (Income) & Expense |
|
|
346 |
|
|
(1) |
|
|
(332) |
|
|
— |
|
|
— |
|
|
13 |
|
| Total Expense & Other (Income) |
|
|
6,784 |
|
|
(289) |
|
|
(332) |
|
|
— |
|
|
— |
|
|
6,162 |
|
Pre-tax Income/(Loss) from Continuing
Operations |
|
|
244 |
|
|
463 |
|
|
332 |
|
|
— |
|
|
— |
|
|
1,039 |
|
Pre-tax Income Margin from
Continuing Operations |
|
|
1.8 |
% |
|
3.5 |
pts. |
|
2.5 |
pts. |
|
— |
pts. |
|
— |
pts. |
|
7.9 |
% |
Provision for/(Benefit from) Income
Taxes (4) |
|
$ |
(160) |
|
$ |
132 |
|
$ |
33 |
|
$ |
19 |
|
$ |
— |
|
$ |
25 |
|
| Effective Tax Rate |
|
|
(65.5) |
% |
|
41.9 |
pts. |
|
24.2 |
pts. |
|
1.8 |
pts. |
|
— |
pts. |
|
2.4 |
% |
| Income from Continuing Operations |
|
$ |
403 |
|
$ |
330 |
|
$ |
299 |
|
$ |
(19) |
|
$ |
— |
|
$ |
1,013 |
|
Income Margin from Continuing
Operations |
|
|
3.1 |
% |
|
2.5 |
pts. |
|
2.3 |
pts. |
|
(0.1) |
pts. |
|
— |
pts. |
|
7.7 |
% |
Diluted Earnings/(Loss) Per Share:
Continuing Operations |
|
$ |
0.45 |
|
$ |
0.37 |
|
$ |
0.33 |
|
$ |
(0.02) |
|
$ |
— |
|
$ |
1.12 |
|
| ____________________ |
| (1) |
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. |
| (2) |
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. |
| (3) |
Primarily relates to fair value
changes in shares of Kyndryl common stock that were retained by
IBM. |
| (4) |
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. |