IBM 2013 Annual Report Download - page 53

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52 Management Discussion
International Business Machines Corporation and Subsidiary Companies
GAAP Reconciliation
The tables below provide a reconciliation of the company’s income statement results as reported under GAAP to its operating earnings
presentation which is a non-GAAP measure. The company’s calculation of operating (non-GAAP) earnings, as presented, may differ from
similarly titled measures reported by other companies. Please refer to the “Operating (non-GAAP) Earnings” section on page 26 for the
company’s rationale for presenting operating earnings information.
($ in millions except per share amounts)
For the fourth quarter 2013: GAAP
Acquisition-
Related
Adjustments
Retirement-
Related
Adjustments
Operating
(non-GAAP)
Gross profit $14,315 $ 105 $ 154 $14,574
Gross profit margin 51.7%0.4 pts. 0.6 pts. 52.6%
SG&A $ 5,989 $(101) $ (90) $ 5,798
RD&E 1,566 0 (14) 1,552
Other (income) and expense (113) (8) 0 (121)
Total expense and other (income) 7,353 (109) (104) 7,140
Pre-tax income 6,962 213 258 7,434
Pre-tax income margin 25.1%0.8 pts. 0.9 pts. 26.8%
Provision for income taxes* $ 777 $ (55) $ 94 $ 817
Effective tax rate 11.2%(1.1) pts. 0.9 pts. 11.0%
Net income $ 6,185 $ 268 $ 164 $ 6,617
Net income margin 22.3%1.0 pts. 0.6 pts. 23.9%
Diluted earnings per share $ 5.73 $0.25 $0.15 $ 6.13
*
The tax impact on operating (non-GAAP) pre-tax income is calculated under the same accounting principles applied to the GAAP pre-tax income which employs an annual effective
tax rate method to the results.
($ in millions except per share amounts)
For the fourth quarter 2012: GAAP
Acquisition-
Related
Adjustments
Retirement-
Related
Adjustments
Operating
(non-GAAP)
Gross profit $15,167 $ 100 $ 60 $15,327
Gross profit margin 51.8% 0.3 pts. 0.2 pts. 52.3%
SG&A $ 5,921 $ (91) $ (29) $ 5,801
RD&E 1,580 0 6 1,586
Other (income) and expense (47) (7) 0 (54)
Total expense and other (income) 7,336 (98) (23) 7,215
Pre-tax income 7,831 198 83 8,112
Pre-tax income margin 26.7% 0.7 pts. 0.3 pts. 27.7%
Provision for income taxes* $ 1,998 $ (45) $ 30 $ 1,983
Effective tax rate 25.5% (1.2) pts. 0.1 pts. 24.4%
Net income $ 5,833 $ 243 $ 53 $ 6,129
Net income margin 19.9% 0.8 pts. 0.2 pts. 20.9%
Diluted earnings per share $ 5.13 $0.21 $0.05 $ 5.39
*
The tax impact on operating (non-GAAP) pre-tax income is calculated under the same accounting principles applied to the GAAP pre-tax income which employs an annual effective
tax rate method to the results.