IBM 2009 Annual Report Download - page 6

    :
Our superior cash ow has enabled us to invest
in the business and to generate substantial returns
to investors. Our 2009 cash investment was
$1.2 billion for six acquisitions — ve of them
in key areas of software. And after investing
$5.8 billion in R&D and $3.7 billion in net capital
expenditures, we were able to return more than
$10 billion to you — $7.4 billion through share
repurchase and $2.9 billion through dividends.
Last year’s dividend increase was 10 percent,
marking the 14th year in a row in which we have
raised our dividend.
In sum, with our excellent nancial position, strong
balance sheet, solid recurring revenue, strong
prot streams and unmatched global reach, we are
condent about the year ahead, and beyond.
Indeed, we achieved our 2010 objective of $10 to
$11 in earnings per share one year early. We believe
that we will again grow EPS by double digits this
year, reaching at least $11.
The information on pages 10 through 15
—
“A Decade of Generating Higher Value at IBM” —
summarizes the story of our transformation,
and describes the opportunities it has opened up
for growth in the coming era.
Leading Our
Industry and
the Market
As we enter a new decade, it’s interesting to reect
upon how the last one began. The conventional
wisdom back then was that the robust IT growth of
the go-go ’90s would continue
— and even after the
dot-com bust, most believed it would resume. It was
thought that buyers of IT would continue to
self-integrate — which would mean that our industry
would remain highly disaggregated — and that
client/server computing would become the pre-
dominant enterprise model.
It wasn’t unreasonable to hold these views.
However, as we looked out, we saw a different
picture — an undercurrent of fundamental change.
As we worked to understand the deeper meaning
of events, to separate the cyclical from the secular
and to apply lessons from our own past, we came
to believe that major shifts were underway
that would reshape our industry and, indeed,
the global economy:
1. Changes in the World: The lowering of trade
barriers, the rise of the developing world and the
emergence of the World Wide Web were unleash-
ing the ow of work on a global scale. We believed
these changes were powerful and irreversible, and
that they would lead to new business models and a
new form of the corporation itself — what we came
to call the globally integrated enterprise.
Since the dot -com crash in 2002 ,
we have added $12 billion to
IBM ’s pre -tax profit base, increased
our pre -tax margin 2.5 times ,
quadrupled our earnings per share
and more than doubled our free
cash flow .
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