IBM 2007 Annual Report Download - page 9

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Ì
Key Drivers
Revenue growth:
We maintain historical revenue
growth through annuity businesses,
global presence and a balanced
business mix.
Margin expansion:
We focus on delivering higher
value to clients and on increasing
productivity, to improve profitability.
Share repurchases:
Our strong cash generation lets us
return value to shareholders by
reducing shares outstanding while
reinvesting for future growth.
Growth initiatives and future
acquisitions:
We invest in key growth initia-
tives and strategic acquisitions to
complement and scale our product
portfolio.
Retirement-related savings:
We expect to achieve retirement-
related cost savings over the next
several years, driven in part by
Plan redesigns.
14%-16%
EPS CGR
(2006-2010)
0
6
4
2
8
10
$12
06
6.06
07
7.18
08 09 10
10
11
12% - 15% CGR
18%
Reinvested
$30 billion
Acquisitions and
Capital Expenditures
Returned to
Shareholders
$53 billion
Share Repurchases
and Dividends
More than
$83 billion
since 2003
As a result, IBM is a higher-performing enterprise
today than it was a decade ago.
Our business model is more aligned with our clients’ needs and generates better
financial results.
4
In May 2007 we shared with investors our 2010 Earnings Per Share
Roadmap — which explains how we expect to achieve EPS growth of
14 to 16 percent and $10 to $11 in earnings per share by 2010. We did
so to give our shareholders a clear understanding of the key factors
driving IBM’s long-term financial objectives. In 2007 we made progress
toward our 2010 objectives by growing earnings per share 18 percent.
This gives us confidence that we can achieve our long-term
financial objectives.
6
That has enabled us to invest in
future sources of growth and
provide record return to investors …
Primary Uses of Cash over
the Past Five Years
5
… while continuing to invest in
R&D — more than $29 billion
over the past five years.
2010 Earnings Per Share Roadmap
We have achieved record
earnings per share …
Pretax earnings from continuing
operations were $14.5 billion, an
increase of 9 percent. Diluted earnings
per share were $7.18, up 18 percent,
marking 20 straight quarters of
growth and five consecutive years
of double-digit growth.
Earnings Per Share
(from continuing operations)
… and record cash
performance.
In 2007 our net cash from operations,
excluding the year-to-year change
in Global Financing receivables,
was $17.4 billion — an increase of
$2.1 billion from last year.
Net Cash from Operations,
Excluding Global Financing
Receivables
($ in billions)
0
2
4
6
8
10
12
14
16
$18
03
12.6
04
12.9
05
13.1
06
15.3
07
17.4