IBM 2013 Annual Report Download - page 9

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“ Every generation of IBMers has the
opportunity—and, I believe, the
responsibility—to invent a new IBM.
This is our time.”
While making all these investments in IBM’s future capabilities,
we were able to return $17.9 billion to you in 2013—approximately
$13.9 billion through gross share repurchases and $4.1 billion
through dividends. Last year’s dividend increase was 12 percent,
marking the 18th year in a row in which we have raised our
dividend, and the 98th consecutive year in which we have
paid one.
However, we must acknowledge that while 2013 was an important
year of transformation, our performance did not meet our
expectations. Our operating pre-tax income was down 8 percent.
Our revenue in 2013, at $99.8 billion, was down 5 percent as
reported and 2 percent at constant currency.
So, while we continue to remix to higher value, we must also
address those parts of our business that are holding us back.
We have two specific challenges, and we are taking steps to
address both.
The first involves shifting the IBM hardware business for new
realities and opportunities. We are accelerating the move
of our Systems product portfolio—in particular, Power and
storage—to growth opportunities and to Linux, following
the lead of our successful mainframe business. The modern
demands of Big Data, cloud and mobile require enterprise-
strength computing, and no other company can match IBM’s
ongoing capabilities and commitment to developing those
essential technologies.
We also announced, in January, an agreement to sell much of
our Intel-based x86 server business to Lenovo. This divestiture
is consistent with our continuing strategy of exiting lower-
margin businesses, such as PCs, hard-disk drives and retail
store solutions. But let me be clear—we are not exiting hardware.