IBM 2008 Annual Report Download - page 20


Management Discussion
INTERNATIONAL BUSINESS MACHINES CORPORATION and Subsidiary Companies
Management Discussion ................................................................................................18
ROAD MAP ............................................................................................................ 18
FORWARD-LOOKING AND CAUTIONARY STATEMENTS ..................................... 18
MANAGEMENT DISCUSSION SNAPSHOT ........................................................... 19
DESCRIPTION OF BUSINESS................................................................................20
YEAR IN REVIEW ...................................................................................................25
PRIOR YEAR IN REVIEW ....................................................................................... 39
DISCONTINUED OPERATIONS ..............................................................................44
OTHER INFORMATION ..........................................................................................44
GLOBAL FINANCING .............................................................................................53
Report Of Management ............................................................................................... 58
Report Of Independent Registered Public Accounting Firm ................................. 59
Consolidated Statements ............................................................................................ 60
Notes ............................................................................................................................... 66
Road Map
The financial section of the International Business Machines Corpor-
ation (IBM or the company)  Annual Report consists of this
Management Discussion, the Consolidated Financial Statements and
the Notes to the Consolidated Financial Statements. This Road Map
is designed to provide the reader with some perspective regarding the
information contained in the financial section.
  
• The Management Discussion is designed to provide readers with
a narrative on the company’s financial results and certain factors
that may affect future prospects from the perspective of the
company’s management. The “Management Discussion Snap shot”
on pages  and  presents an overview of the key performance
drivers in .
• Beginning with the “Year in Review” on page , the Management
Discussion contains the results of operations for each segment of
the business, a discussion of the company’s financial position and
cash flows, in addition to other key information and data. It is
useful to read the Management Discussion in conjunction with
note V, “Segment Information,” on pages  to .
• Global Financing is a reportable segment that is measured as if it
were a standalone entity. A separate “Global Financing” section is
included beginning on page . The information presented in this
section is consistent with this separate company view.
• The Consolidated Financial Statements are presented on pages 
through . These statements provide an overview of the compa-
ny’s income and cash flow performance and its financial position.
• The notes follow the Consolidated Financial Statements. Among
other items, the notes contain the company’s accounting policies
(pages  to ), acquisitions and divestitures (pages  through ),
detailed information on specific items within the financial state-
ments, certain contingencies and commitments (pages  to ),
and retirement-related benefits information (pages  to ).
• The reference to “adjusted for currency” in the Management
Discussion is made so that certain financial results can be viewed
without the impacts of fluctuating foreign currency exchange
rates and therefore facilitates a comparative view of business
performance. See “Currency Rate Fluctuations” on page  for
additional information.
• Within the financial tables in this Annual Report, certain columns
and rows may not add due to the use of rounded numbers for
disclosure purposes. Percentages reported in the financial tables
throughout this Annual Report are calculated from the underly-
ing whole-dollar numbers.
 
On December , , the company sold its hard disk drive (HDD)
business to Hitachi, Ltd. (Hitachi). The HDD business was accounted
for as a discontinued operation under generally accepted accounting
principles (GAAP) and therefore, the HDD results of operations and
cash flows have been removed from the company’s results of con-
tinuing operations and cash flows for all periods presented in this
document except , in which there was no activity. See page  for
additional information.
Forward-Looking
and Cautionary Statements
Certain statements contained in this Annual Report may constitute
forward-looking statements within the meaning of the Private Secur-
ities Litigation Reform Act of . These statements involve a number
of risks, uncertainties and other factors that could cause actual results
to be materially different, as discussed more fully elsewhere in this
Annual Report and in the company’s filings with the Securities and
Exchange Commission (SEC), including the company’s  Form
-K filed on February , .