IBM 2009 Annual Report Download - page 20

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Overview
The financial section of the International Business Machines Cor-
por ation (IBM or the company) 2009 Annual Report includes the
Management Discussion, the Consolidated Financial State ments
and the Notes to the Consolidated Financial State ments. This
Over view is designed to provide the reader with some perspec-
tive regarding the information contained in the financial section.
Organization of Information
• The Management Discussion is designed to provide readers
with an overview of the business and a narrative on the com-
pany’s financial results and certain factors that may affect
its future prospects from the perspective of the company’s
management. The “Management Discussion Snap shot” on
pages 19 and 20 presents an overview of the key perfor-
mance drivers in 2009.
• Beginning with the “Year in Review” on page 25, the Manage-
ment Discussion contains the results of operations for each
reportable segment of the business and a discussion of the
company’s financial position and cash flows. Other key sections
within the Management Discussion include: “Looking Forward”
on pages 47 to 49 and “Liquidity and Capital Resources” on
pages 49 to 52. It is useful to read the Management Dis-
cussion in conjunction with note V, “Segment Information,” on
pages 122 to 126.
• 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 57. The information
presented in this section is consistent with this separate
company view.
• The Consolidated Financial Statements are presented on
pages 64 through 69. These statements provide an overview
of the company’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 account-
ing policies (pages 70 to 79), acquisitions and divestitures
(pages 82 to 86), detailed information on specific items within
the financial statements, certain contingencies and commit-
ments (pages 99 to 101), and retirement-related benefits
information (pages 109 through 121).
• The references to “adjusted for currency” or “at constant
currency” in the Management Discussion are made so that
certain financial results can be viewed without the impact
of fluctuations in foreign currency exchange rates, thereby
facilitating period-to-period comparisons of business perfor-
mance. Financial results adjusted for currency are calculated
by translating current period activity in local currency using
the comparable prior year period’s currency conversion rate.
This approach is used for all countries where the functional
currency is the local country currency. See “Currency Rate
Fluctuations” on page 54 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 are
calculated from the underlying whole-dollar numbers.
Discontinued Operations
On December 31, 2002, 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 in the United States (GAAP) and
therefore, the HDD results of operations and cash flows have
been removed from the company’s results of continuing opera-
tions and cash flows for the year 2007. There was no activity in
2008 or 2009. See page 47 for additional information.
Forward-Looking
and Cautionary Statements
Certain statements contained in this Annual Report may consti-
tute forward-looking statements within the meaning of the Private
Secur ities Litigation Reform Act of 1995. 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 2009 Form 10-K filed on February 23, 2010.
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