IBM 2015 Annual Report Download - page 37

Download and view the complete annual report

Please find page 37 of the 2015 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.

Page out of 156

  • 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
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156

35
Management Discussion
International Business Machines Corporation and Subsidiary Companies
Total geographic revenue of $81,430 million in 2015 decreased
11.8percent as reported and 1percent adjusted for currency
(8points) and the divestitures of the Systemx and customer care
businesses (3points) compared to 2014. Major market coun-
tries decreased 9.9percent as reported and 1percent adjusted
for currency (8points) and the divested businesses (2points).
Within the major markets, performance varied in 2015. While the
U.S. was down compared to the prior year, revenue in Germany,
Japan and the UK grew year to year on an adjusted basis. Over-
all, growth market countries decreased 18.4percent as reported
and 3percent adjusted for currency (9points) and the divested
businesses (6points). From a regional perspective, on an adjusted
basis, growth in Latin America and the Middle East and Africa
region was more than offset by declines in the Asia Pacific growth
market countries.
Americas revenue of $38,486 million decreased 7.1percent
as reported and 2percent adjusted for currency (3points) and
divestitures (2points) compared to 2014 with a decline in North
America and growth in Latin America on an adjusted basis. The
U.S. decreased 4.4percent as reported and 3percent adjusted for
divestitures. Canada was down 17.2percent as reported and 2per-
cent adjusted for currency (13points) and divestitures (2points).
In Latin America, Brazil decreased 26.0percent as reported and
2percent adjusted for currency (22points) and the divested
businesses (2points), while Mexico had growth of 0.5percent
as reported and 14percent adjusted for currency (9points) and
divestitures (4points).
Europe/Middle East/Africa (EMEA) revenue of $26,073 million
in 2015 decreased 15.1percent as reported, but was flat year to
year adjusted for currency (13points) and the divested businesses
(3points). On an adjusted basis, there was growth in Germany
and the UK. Germany decreased 13.2percent as reported, but
grew 7percent adjusted for currency (17points) and the divested
businesses (3points). The UK decreased 6.3percent year to year
as reported, but grew 3percent adjusted for currency (7points)
and the divested businesses (2points). The Middle East and Africa
region decreased 4.8percent as reported, but grew 5percent
adjusted for the divested businesses (6points) and currency
(4points). Russia decreased 32.2percent as reported and 24per-
cent adjusted for the divestitures.
Asia Pacific revenue of $16,871 million decreased 16.5percent
as reported and 2percent adjusted for currency (9points) and the
divested businesses (6points) compared to the prior year. Japan
decreased 9.9percent as reported, but had growth of 5percent
adjusted for currency (13points) and the divested businesses
(2points). On an adjusted basis, the Japan growth was more than
offset by a decline in other markets. China decreased 34.4percent
as reported and 21percent adjusted for the divested businesses
(12points) and currency (1point). India decreased 3.8percent as
reported, but had growth of 8percent adjusted for the divested
businesses (7points) and currency (5points).
Total Expense and Other (Income)
($ inmillions)
For the year ended December 31: 2015 2014
Yr.-to-Yr.
Percent/
Margin
Change
Total consolidated expense
and other (income) $24,740 $26,421 (6.4)%
Non-operating adjustments
Amortization of acquired
intangible assets (304) (374) (18.8)
Acquisition-related charges (26) (12) 112.6
Non-operating retirement-related
(costs)/income (581) (180) 222.4
Operating (non-GAAP)
expense and other (income) $23,830 $25,855 (7.8)%
Total co nso lid ated
expense-to-revenue ratio 30.3% 28.5% 1.8 pts.
Operating (non-GAAP)
expense-to-revenue ratio 29.2% 27.9% 1.3 pts.
The key drivers of the year-to-year change in total expense and
other (income) were approximately:
Total Operating
Consolidated (non-GAAP)
• Currency* (9) points (9) points
• Systemx divestiture (2) points (2) points
• Divestiture gains 6 points 6 points
• Workforce rebalancing (3) points (3) points
* Reflects impacts of translation and hedging programs.
For additional information regarding total expense and other
(income) for both expense presentations, see the following anal-
yses by category.