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40 Management Discussion
International Business Machines Corporation and Subsidiary Companies
• A decrease in other accrued expenses and liabilities of $1,641
million ($1,281 million adjusted for currency) driven by net
activity associated with the Microelectronics divestiture and
workforce rebalancing payments; and
• A decrease in deferred income of $856million ($226million
adjusted for currency); and a decline of $837million ($568
million adjusted for currency) in accounts payable reflecting
the wind down of the divested Systemx business payables
and decreases in counterparty collateral postings; partially
offset by
• An increase in short-term debt of $731million ($872million
adjusted for currency).
Cash Flow
The company’s cash flows from operating, investing and financ-
ing activities, as reflected in the Consolidated Statement of Cash
Flows on page79 are summarized in the table below. These
amounts include the cash flows associated with the Global Financ-
ing business.
($ inmillions)
For the year ended December 31: 2015 2014
Net cash provided by/(used in)
continuing operations
Operating activities $17,008 $ 16,868
Investing activities (8,159) (3,001)
Financing activities (9,166) (15,452)
Effect of exchange rate changes on
cash and cash equivalents (473) (655)
Net change in cash and cash equivalents $ (790) $ (2,240)
Net cash provided by operating activities increased by $139million
in 2015 driven by the following key factors:
• A decline in cash income tax payments ($3,092 million); and
• An improvement in sales cycle working capital of $1,192million;
partially offset by
• Performance-related declines within net income; and
• An increase in performance-related compensation payments
of $470million.
Net cash used in investing activities increased $5,158 million
driven by:
• A decrease in cash provided by divestitures of $2,758
million; and
• An increase in cash used related to acquisitions of
$2,693 million.
Net cash used in financing activities decreased $6,286 million as
compared to the prior year driven by the following factors:
• A decrease of $9,070 million of cash used for gross share
repurchases; partially offset by
• A decrease in net cash sourced from debt transactions of
$1,764 million driven by a lower level of issuances in the current
year; and
• An increase in dividend payments of $632million.
Noncurrent Assets and Liabilities
($ inmillions)
At December 31: 2015 2014
Noncurrent assets $67,991 $69,894* **
Long-term debt $33,428 $34,991**
Noncurrent liabilities (excluding debt) $28,374 $30,686*
* Reclassified to reflect adoption of the FASB guidance on deferred taxes in
consolidated financial statements. Refer to noteB, “Accounting Changes,” for
additional information.
** Reclassified to reflect adoption of the FASB guidance on debt issuance costs in
consolidated financial statements. Refer to noteB, “Accounting Changes,” for
additional information.
The decrease in noncurrent assets of $1,903 million (an increase
of $1,735 million adjusted for currency) was driven by:
• A decrease of $1,853 million ($1,417 million adjusted for
currency) in deferred taxes driven by the utilization of the tax
benefit associated with the Microelectronics divestiture; and
• A decrease of $1,096 million ($186million adjusted for cur-
rency) in long-term financing receivables; partially offset by
• An increase in goodwill of $1,466 million ($2,561 adjusted for
currency) resulting from acquisitions during the year.
Long-term debt decreased $1,563 million ($862million adjusted
for currency) driven by:
• Reclassification of $5,549 million to short-term debt to reflect
upcoming maturities; partially offset by
• Debt issuances of $4,647 million.
Other noncurrent liabilities, excluding debt, decreased $2,312 million
($387million adjusted for currency) primarily driven by:
• A decrease in retirement and nonpension postretirement
liabilities of $1,757 million driven by a currency impact of
$1,295million; and
• A decline of $635million ($207million adjusted for currency)
in other liabilities associated with a reclass to short-term
payables of a portion of the consideration payment associ-
ated with the Microelectronics divestiture.