IBM 2012 Annual Report Download - page 2
Download and view the complete annual report
Please find page 2 of the 2012 IBM annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
1 -
2 -
3 -
4 -
5 -
6 -
7 -
8 -
9 -
10 -
11 -
12 -
13 -
14
-
15
-
16
-
17
-
18
-
19
-
20
-
21
-
22
-
23
-
24
-
25
-
26
-
27
-
28
-
29
-
30
-
31
-
32
-
33
-
34
-
35
-
36
-
37
-
38
-
39
-
40
-
41
-
42
-
43
-
44
-
45
-
46
-
47
-
48
-
49
-
50
-
51
-
52
-
53
-
54
-
55
-
56
-
57
-
58
-
59
-
60
-
61
-
62
-
63
-
64
-
65
-
66
-
67
-
68
-
69
-
70
-
71
-
72
-
73
-
74
-
75
-
76
-
77
-
78
-
79
-
80
-
81
-
82
-
83
-
84
-
85
-
86
-
87
-
88
-
89
-
90
-
91
-
92
-
93
-
94
-
95
-
96
-
97
-
98
-
99
-
100
-
101
-
102
-
103
-
104
-
105
-
106
-
107
-
108
-
109
-
110
-
111
-
112
-
113
-
114
-
115
-
116
-
117
-
118
-
119
-
120
-
121
-
122
-
123
-
124
-
125
-
126
-
127
-
128
-
129
-
130
-
131
-
132
-
133
-
134
-
135
-
136
-
137
-
138
-
139
-
140
-
141
-
142
-
143
-
144
-
145
-
146
 |
 |
I am pleased to report that in 2012, IBM
achieved record operating earnings per
share, record free cash flow and record profit
margins, with revenues that were flat at
constant currency. Operating earnings per
share were up 13 percent, putting us well
on track to our 2015 Road Map objective of
at least $20 of operating earnings per share.
Importantly, we continued to deliver value
to you, our owners.
This performance is a testament to our strategic position and
capabilities, the discipline of our management systems, and the
dedication and expertise of more than 430,000 IBMers around
the world. Importantly, it reflects the impact of a distinct choice
we have made about IBM’s business and technology model.
IBM is an innovation company. Both in what we do
and in how we do it, we pursue continuous transformation
—
always remixing to higher value in our portfolio and skills,
in the capabilities we deliver to our clients and in our own
operations and management practices.
This is not the only path to success in our industry,
and it is not the easiest one. But it is ours. In this letter, I will
report on our 2012 results, and then put them in context
of our model of continuous transformation.
Results in 2012
Earnings per share: Diluted operating earnings per share
in 2012 were $15.25, a new record. This marked 10 straight
years of double-digit EPS growth.
Margins: IBM’s operating pre-tax income margin rose
for the 10th consecutive year
—
to 22.2 percent, up 12 points
since 2000.
Cash flow: IBM has consistently generated strong cash
flow, a key indicator of real business performance. In 2012
our free cash flow was $18.2 billion, a record for IBM and
$12 billion higher than a decade ago. We ended 2012 with
$11.1 billion of cash and marketable securities.
Revenue and income: Our revenue in 2012 was
$104.5 billion, down 2 percent as reported and flat
at constant currency. We grew operating net income
by 8 percent, to $17.6 billion, our highest ever.
Investment and return to shareholders: In 2012 we invested
$3.7 billion for 11 acquisitions in key areas of software
and services; $4.3 billion in net capital expenditures; and
$6.3 billion in R&D. We were able to return $15.8 billion to
you
—
$12 billion through share repurchases and $3.8 billion
through dividends. Last year’s dividend increase was
13 percent, marking the 17th year in a row in which we
have raised our dividend, and the 97th consecutive year
in which we have paid one.
Since 2000, we have added $14.6 billion to IBM’s
operating pre-tax profit base, and increased our pre-tax
income 1.7 times, our operating earnings per share
3.6 times and our free cash flow 1.7 times. Cumulatively,
we have generated about $150 billion of free cash flow.
IBM’s Model: Continuous Transformation
In an industry characterized by a relentless cycle of
innovation and commoditization, one model for success
is that of the commodity player
—
winning through low
Dear IBM Investor:
1
A Letter from the Chairman