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IBM Reports 2016 Fourth-Quarter and Full-Year Results

ARMONK, N.Y.–(BUSINESS WIRE)–IBM (NYSE:IBM)

Continued Strong Growth in Strategic Imperatives Led by IBM Cloud

Highlights

  • Diluted EPS from stability operations: GAAP of $4.73; Operating
    (non-GAAP) of $5.01
  • Revenue from stability operations of $21.8 billion
  • Strategic imperatives income for full-year 2016 of $32.8 billion
    adult 13 percent (up 14 percent adjusting for currency) represents 41
    percent of IBM revenue
  • Cloud income of $13.7 billion for full-year 2016, adult 35 percent


    Cloud as-a-service annual exit run rate of $8.6 billion during year end,
    adult 61 percent year to year (up 63 percent adjusting for currency)

  • 2017 EPS Expectations: GAAP of during slightest $11.95; Operating
    (non-GAAP) of during slightest $13.80

IBM (NYSE:IBM) currently announced fourth-quarter and full-year 2016
gain results.

“In 2016, a vital imperatives grew to paint some-more than 40
percent of a sum income and we have dynamic ourselves as the
industry’s heading cognitive solutions and cloud height company,” said
Ginni Rometty, IBM chairman, boss and arch executive officer. “IBM
Watson is a world’s heading AI height for business, and emerging
solutions such as IBM Blockchain are enabling new levels of trust in
exchange of each kind. More and some-more clients are selecting a IBM
Cloud since of a differentiated capabilities, that are assisting to
renovate industries, such as financial services, airlines and retail.”

“In 2016, we again done estimable collateral investments, increasing our
RD spending and acquired 15 companies — a sum of some-more than $15
billion opposite these elements. The acquisitions serve strengthened our
capabilities in analytics, security, cognitive and cloud, while
expanding a turn of attention imagination with additions such as Truven
Health Analytics and Promontory Financial Group,” pronounced Martin Schroeter,
IBM comparison clamp boss and arch financial officer. “At a same
time, we returned roughly $9 billion to shareholders by dividends
and sum share repurchases.”

Strategic Imperatives

Fourth-quarter cloud revenues increasing 33 percent. The annual exit run
rate for cloud as-a-service income increasing to $8.6 billion from $5.3
billion during year-end 2015. Revenues from analytics increasing 9 percent.
Revenues from mobile increasing 16 percent (up 17 percent adjusting for
currency) and revenues from confidence increasing 7 percent (up 8 percent
adjusting for currency).

For a full year, revenues from vital imperatives increasing 13
percent (up 14 percent adjusting for currency). Cloud revenues increased
35 percent to $13.7 billion. The annual exit run rate for cloud
as-a-service income increasing 61 percent (up 63 percent adjusting for
currency) year to year. Revenues from analytics increasing 9 percent.
Revenues from mobile increasing 34 percent (up 35 percent adjusting for
currency) and from confidence increasing 13 percent (up 14 percent
adjusting for currency).

Full-Year 2017 Expectations

The association expects handling (non-GAAP) diluted gain per share of
during slightest $13.80 and GAAP diluted gain per share of during slightest $11.95.
Operating (non-GAAP) diluted gain per share bar $1.85 per share
of charges for amortization of purchased unsubstantial assets, other
acquisition-related charges and retirement-related charges. IBM expects
a giveaway money upsurge fulfilment rate in additional of 90 percent of GAAP net
income.

Cash Flow and Balance Sheet

In a fourth quarter, a association generated net money from operating
activities of $3.2 billion; or $5.6 billion incompatible Global Financing
receivables. IBM’s giveaway money upsurge was $4.7 billion. IBM returned $1.3
billion in dividends and $0.9 billion of sum share repurchases to
shareholders. At a finish of Dec 2016, IBM had $5.1 billion
remaining in a stream share repurchase authorization.

The association generated full-year giveaway money upsurge of $11.6 billion,
incompatible Global Financing receivables. The association returned $8.8
billion to shareholders by $5.3 billion in dividends and $3.5
billion of sum share repurchases.

IBM finished a fourth-quarter 2016 with $8.5 billion of money on hand.
Debt, including Global Financing debt of $27.9 billion, totaled $42.2
billion. Core (non-Global Financing) debt totaled $14.3 billion. The
change piece stays clever and is good positioned to support the
business over a prolonged term.

Segment Results for Fourth Quarter

  • Cognitive Solutions (includes solutions program and transaction
    guess software) –
    revenues of $5.3 billion, adult 1.4 percent
    (up 2.2 percent adjusting for currency) were driven by expansion in
    cloud, analytics and security.
  • Global Business Services (includes consulting, tellurian process
    services and focus management) –
    revenues of $4.1 billion,
    down 4.1 percent (down 3.6 percent adjusting for currency).
  • Technology Services Cloud Platforms (includes
    infrastructure services, technical support services and integration
    software) —
    revenues of $9.3 billion, adult 1.7 percent (up 2.4
    percent adjusting for currency). Growth was driven by clever hybrid
    cloud services, analytics and confidence performance.
  • Systems (includes systems hardware and handling systems software)
    revenues of $2.5 billion, down 12.5 percent (down 12.1 percent
    adjusting for currency). Gross distinction margins softened driven by z
    Systems performance.
  • Global Financing (includes financing and used apparatus sales) –
    revenues of $447 million, down 1.5 percent (down 2.1 percent adjusting
    for currency).

Full-Year 2016 Results

Diluted gain per share from stability operations were $12.39, down
9 percent compared to a 2015 period. Net income from continuing
operations for a twelve months finished Dec 31, 2016 was $11.9
billion compared with $13.4 billion in a year-ago period, a decrease
of 11 percent.

Consolidated net income was $11.9 billion compared to $13.2 billion in
a year-ago period. Consolidated diluted gain per share were $12.38
compared to $13.42, down 8 percent year to year. Revenues from
stability operations for a twelve-month duration totaled $79.9 billion,
a diminution of 2 percent year to year compared with $81.7 billion for the
twelve months of 2015.

Operating (non-GAAP) diluted gain per share from continuing
operations were $13.59 compared with $14.92 per diluted share for the
2015 period, a diminution of 9 percent. Operating (non-GAAP) net income
from stability operations for a twelve months finished Dec 31, 2016
was $13.0 billion compared with $14.7 billion in a year-ago period, a
diminution of 11 percent.

Forward-Looking and Cautionary Statements

Except for a chronological information and discussions contained herein,
statements contained in this recover might consecrate forward-looking
statements within a definition of a Private Securities Litigation
Reform Act of 1995. Forward-looking statements are formed on the
company’s stream assumptions per destiny business and financial
performance. These statements engage a series of risks, uncertainties
and other factors that could means tangible formula to differ materially,
including a following: a downturn in mercantile sourroundings and client
spending budgets; a company’s disaster to accommodate expansion and productivity
objectives, a disaster of a company’s creation initiatives; risks
from investing in expansion opportunities; disaster of a company’s
egghead skill portfolio to forestall rival offerings and the
disaster of a association to obtain required licenses; cybersecurity and
information remoteness considerations; fluctuations in financial results, impact
of inner legal, economic, domestic and health conditions; adverse
effects from environmental matters, taxation matters and a company’s
grant plans; ineffectual inner controls; a company’s use of
accounting estimates; a company’s ability to attract and keep key
crew and a faith on vicious skills; impacts of relationships
with vicious suppliers; product peculiarity issues; impacts of business
with supervision clients; banking fluctuations and patron financing
risks; impact of changes in marketplace liquidity conditions and customer
credit risk on receivables; faith on third celebration distribution
channels and ecosystems; a company’s ability to successfully manage
acquisitions, alliances and dispositions; risks from authorised proceedings;
risk factors associated to IBM securities; and other risks, uncertainties
and factors discussed in a company’s Form 10-Qs, Form 10-K and in the
company’s other filings with a U.S. Securities and Exchange Commission
(SEC) or in materials incorporated therein by reference. Any
forward-looking matter in this recover speaks usually as of a date on
that it is made. The association assumes no requirement to refurbish or revise
any forward-looking statements.

Presentation of Information in this Press Release

In an bid to yield investors with additional information regarding
a company’s formula as dynamic by generally supposed accounting
beliefs (GAAP), a association has also disclosed in this press release
a following non-GAAP information that supervision believes provides
useful information to investors:

IBM formula –

  • presenting handling (non-GAAP) gain per share amounts and related
    income matter items;
  • adjusting for giveaway money flow;
  • adjusting for banking (i.e., during consistent currency).

Free money upsurge superintendence is subsequent regulating an guess of profit, working
collateral and operational money outflows. The association views Global
Financing receivables as a profit-generating investment, that it seeks
to maximize and therefore it is not deliberate when formulating guidance
for giveaway money flow. As a result, a association does not guess a GAAP
Net Cash from Operations expectancy metric.

The motive for management’s use of these non-GAAP measures is
enclosed in Exhibit 99.2 in a Form 8-K that includes this press
recover and is being submitted currently to a SEC.

Conference Call and Webcast

IBM’s unchanging quarterly gain discussion call is scheduled to begin
during 5:00 p.m. EST, today. The Webcast might be accessed around a couple during http://www.ibm.com/investor/events/earnings/4q16.html.
Presentation charts will be accessible shortly before a Webcast.

Financial Results Below (certain amounts might not supplement due to use
of dull numbers; percentages presented are distributed from the
underlying whole-dollar amounts).

INTERNATIONAL BUSINESS MACHINES CORPORATION

COMPARATIVE FINANCIAL RESULTS

(Unaudited; Dollars in millions solely per share amounts)

 

 

 

 

 

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2016

 

2015*

2016

 

2015*

 

REVENUE

Cognitive Solutions

$

5,297

$

5,225

$

18,187

$

17,841

Global Business Services

4,121

4,297

16,700

17,166

Technology Services Cloud Platforms

9,308

9,149

35,337

35,142

Systems

2,530

2,892

7,714

9,547

Global Financing

447

454

1,692

1,840

Other

 

66

 

 

 

43

 

 

289

 

 

 

206

 

TOTAL REVENUE

21,770

22,059

79,919

81,741

 

GROSS PROFIT

10,893

11,407

38,294

40,684

 

GROSS PROFIT MARGIN

Cognitive Solutions

82.7

%

85.7

%

81.9

%

85.1

%

Global Business Services

26.9

%

28.2

%

27.0

%

28.2

%

Technology Services Cloud Platforms

42.9

%

44.3

%

41.9

%

42.7

%

Systems

56.9

%

55.8

%

55.7

%

55.8

%

Global Financing

36.2

%

39.9

%

38.7

%

45.6

%

 

TOTAL GROSS PROFIT MARGIN

50.0

%

51.7

%

47.9

%

49.8

%

 

 

EXPENSE AND OTHER INCOME

S,GA

4,976

5,157

21,069

20,430

R,DE

1,431

1,362

5,751

5,247

Intellectual skill and

tradition growth income

(521

)

(193

)

(1,631

)

(682

)

Other (income) and expense

(136

)

(146

)

145

(724

)

Interest expense

157

128

630

468

 

 

 

 

 

 

TOTAL EXPENSE AND OTHER INCOME

5,907

6,308

25,964

24,740

 

INCOME FROM CONTINUING OPERATIONS

BEFORE INCOME TAXES

4,986

5,098

12,330

15,945

Pre-tax margin

22.9

%

23.1

%

15.4

%

19.5

%

 

Provision for / (Benefit) from income taxes

480

638

449

2,581

Effective taxation rate

9.6

%

12.5

%

3.6

%

16.2

%

 

INCOME FROM CONTINUING OPERATIONS

$

4,505

$

4,460

$

11,881

$

13,364

 

DISCONTINUED OPERATIONS

Income/(Loss) from dropped operations, net of taxes

 

(4

)

 

 

3

 

 

(9

)

 

 

(174

)

 

NET INCOME

$

4,501

 

 

$

4,463

 

$

11,872

 

 

$

13,190

 

 

EARNINGS PER SHARE OF COMMON STOCK:

Assuming Dilution

Continuing Operations

$

4.73

$

4.59

$

12.39

$

13.60

Discontinued Operations

 

($0.01

)

 

$

0.00

 

 

($0.01

)

 

 

($0.18

)

TOTAL

$

4.72

 

 

$

4.59

 

$

12.38

 

 

$

13.42

 

Basic

Continuing Operations

$

4.75

$

4.60

$

12.44

$

13.66

Discontinued Operations

 

($0.01

)

 

$

0.00

 

 

($0.01

)

 

 

($0.18

)

TOTAL

$

4.74

 

 

$

4.60

 

$

12.43

 

 

$

13.48

 

 

WEIGHTED-AVERAGE NUMBER OF COMMON SHARES

OUTSTANDING (M’s):

Assuming Dilution

952.7

972.8

958.7

982.7

Basic

948.6

969.4

955.4

978.7

 

* Recast to heed with 2016 shred presentation.

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEET

(Unaudited)

 

At

 

At

(Dollars in Millions)

December 31,

December 31,

2016

2015

ASSETS:

 

Current Assets:

Cash and money equivalents

$

7,826

$

7,686

Marketable securities

701

508

Notes and accounts receivable – trade, net

9,182

8,333

Short-term financing receivables, net

19,006

19,020

Other accounts receivable, net

1,057

1,201

Inventory

1,553

1,551

Prepaid waste and other stream assets

4,564

4,205

 

 

Total Current Assets

43,888

42,504

 

Property, plant and equipment, net

10,830

10,727

Long-term financing receivables, net

9,021

10,013

Prepaid grant assets

3,034

1,734

Deferred taxes

5,224

4,822

Goodwill and intangibles, net

40,887

35,508

Investments and various assets

4,585

5,187

 

 

Total Assets

$

117,470

 

$

110,495

 

 

 

LIABILITIES:

 

Current Liabilities:

Taxes

$

3,235

$

2,847

Short-term debt

7,513

6,461

Accounts payable

6,209

6,028

Deferred income

11,035

11,021

Other liabilities

8,283

7,913

 

 

Total Current Liabilities

36,275

34,269

 

Long-term debt

34,655

33,428

Retirement associated obligations

17,070

16,504

Deferred income

3,600

3,771

Other liabilities

7,477

8,099

 

 

Total Liabilities

99,078

96,071

 

 

EQUITY:

 

IBM Stockholders’ Equity:

Common stock

53,935

53,262

Retained earnings

152,759

146,124

Treasury batch — during cost

(159,050

)

(155,518

)

Accumulated other extensive income/(loss)

(29,398

)

(29,607

)

 

 

Total IBM stockholders’ equity

18,246

14,262

 

Noncontrolling interests

146

162

 

 

Total Equity

18,392

14,424

 

 

Total Liabilities and Equity

$

117,470

 

$

110,495

 

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

CASH FLOW ANALYSIS

(Unaudited)

 

 

 

 

Three Months Ended

Twelve Months Ended

(Dollars in Millions)

December 31,

December 31,

2016

2015

2016

2015

 

Net Cash Provided by Operating Activities per GAAP:

$

3,217

$

5,278

$

16,518

$

17,008

 

Less: change in Global Financing (GF)

Receivables

(2,429

)

(1,810

)

1,218

152

Capital Expenditures, Net

(925

)

(1,016

)

(3,726

)

(3,780

)

 

Free Cash Flow

4,721

6,072

11,574

13,075

 

Acquisitions

(235

)

(2,529

)

(5,679

)

(3,349

)

Divestitures

(490

)

87

(454

)

(401

)

Dividends

(1,329

)

(1,261

)

(5,256

)

(4,897

)

Share Repurchase

(871

)

(764

)

(3,502

)

(4,609

)

Non-GF Debt

(2,048

)

(898

)

1,317

(128

)

Other (includes GF Receivables and GF Debt)

(1,189

)

(2,080

)

2,333

28

 

Change in Cash, Cash Equivalents and

Short-term Marketable Securities

 

($1,441

)

 

 

($1,373

)

$

332

 

 

($282

)

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

CASH FLOW

(Unaudited)

 

 

 

 

Three Months Ended

Twelve Months Ended

(Dollars in Millions)

December 31,

December 31,

2016

2015

2016

2015

 

Net Income from Operations

$

4,501

$

4,463

$

11,872

$

13,190

Depreciation/Amortization of Intangibles

1,127

990

4,381

3,856

Stock-based Compensation

141

99

544

468

Working Capital / Other

(124

)

1,514

(1,497

)

(729

)

Global Financing A/R

(2,429

)

(1,810

)

1,218

152

Loss on Microelectronics Business Disposal

0

23

0

71

Net Cash Provided by Operating Activities

$

3,217

$

5,278

$

16,518

$

17,008

Capital Expenditures, net of payments proceeds

(925

)

(1,016

)

(3,726

)

(3,780

)

Divestitures, net of money transferred

(490

)

87

(454

)

(401

)

Acquisitions, net of money acquired

(235

)

(2,529

)

(5,679

)

(3,349

)

Marketable Securities / Other Investments, net

(1,286

)

(1,987

)

(676

)

(629

)

Net Cash Used in Investing Activities

($2,936

)

($5,445

)

($10,536

)

($8,159

)

Debt, net of payments proceeds

875

626

2,763

19

Dividends

(1,329

)

(1,261

)

(5,256

)

(4,897

)

Common Stock Repurchases

(871

)

(764

)

(3,502

)

(4,609

)

Common Stock Transactions – Other

37

50

204

322

Net Cash Used in Financing Activities

($1,287

)

($1,348

)

($5,791

)

($9,166

)

Effect of Exchange Rate changes on Cash

(206

)

(279

)

(51

)

(473

)

Net Change in Cash Cash Equivalents

($1,213

)

($1,794

)

$

140

($790

)

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

SEGMENT DATA

(Unaudited)

 

 

 

 

 

FOURTH – QUARTER 2016

Cognitive Solutions

Industry Services

Technology

Global

Services

(Dollars in Millions)

Cognitive

Business

Cloud

Global

Solutions

 

Services

 

Platforms

 

Systems

 

Financing

Revenue

External

$

5,297

$

4,121

$

9,308

$

2,530

$

447

Internal

 

701

 

 

 

100

 

 

 

214

 

 

 

156

 

 

 

462

 

Total Segment Revenue

$

5,999

$

4,221

$

9,522

$

2,686

$

909

 

Pre-tax Income from Continuing Operations

2,313

522

1,882

579

448

 

Pre-tax margin

38.6

%

12.4

%

19.8

%

21.6

%

49.3

%

 

 

Change YTY Revenue – External

1.4

%

(4.1

)%

1.7

%

(12.5

)%

(1.5

)%

Change YTY Revenue – External @constant currency

2.2

%

(3.6

)%

2.4

%

(12.1

)%

(2.1

)%

 

 

FOURTH – QUARTER 2015*

Cognitive Solutions

Industry Services

Technology

Global

Services

(Dollars in Millions)

Cognitive

Business

Cloud

Global

Solutions

 

Services

 

Platforms

 

Systems

 

Financing

Revenue

External

$

5,225

$

4,297

$

9,149

$

2,892

$

454

Internal

 

520

 

 

 

118

 

 

 

198

 

 

 

207

 

 

 

763

 

Total Segment Revenue

$

5,744

$

4,415

$

9,347

$

3,099

$

1,216

 

Pre-tax Income from Continuing Operations

2,296

707

1,808

674

674

 

Pre-tax margin

40.0

%

16.0

%

19.3

%

21.7

%

55.4

%

 

* Recast to heed with 2016 shred presentation.

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

SEGMENT DATA

(Unaudited)

 

 

 

 

 

TWELVE – MONTHS 2016

Cognitive Solutions

Industry Services

Technology

Global

Services

(Dollars in Millions)

Cognitive

Business

Cloud

Global

Solutions

 

Services

 

Platforms

 

Systems

 

Financing

Revenue

External

$

18,187

$

16,700

$

35,337

$

7,714

$

1,692

Internal

 

2,630

 

 

 

409

 

 

 

715

 

 

 

750

 

 

 

1,802

 

Total Segment Revenue

$

20,817

$

17,109

$

36,052

$

8,464

$

3,494

 

Pre-tax Income from Continuing Operations

6,352

1,732

4,707

933

1,656

 

Pre-tax margin

30.5

%

10.1

%

13.1

%

11.0

%

47.4

%

 

 

Change YTY Revenue – External

1.9

%

(2.7

)%

0.6

%

(19.2

)%

(8.0

)%

Change YTY Revenue – External @constant currency

2.7

%

(2.5

)%

1.4

%

(18.9

)%

(6.9

)%

 

 

TWELVE – MONTHS 2015*

Cognitive Solutions

Industry Services

Technology

Global

Services

(Dollars in Millions)

Cognitive

Business

Cloud

Global

Solutions

 

Services

 

Platforms

 

Systems

 

Financing

Revenue

External

$

17,841

$

17,166

$

35,142

$

9,547

$

1,840

Internal

 

2,215

 

 

 

499

 

 

 

698

 

 

 

778

 

 

 

2,637

 

Total Segment Revenue

$

20,055

$

17,664

$

35,840

$

10,325

$

4,477

 

Pre-tax Income from Continuing Operations

7,245

2,602

5,669

1,722

2,364

 

Pre-tax margin

36.1

%

14.7

%

15.8

%

16.7

%

52.8

%

 

* Recast to heed with 2016 shred presentation.

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

U.S. GAAP TO OPERATING (Non-GAAP) RESULTS RECONCILIATION

(Unaudited; Dollars in millions solely per share amounts)

 

FOURTH – QUARTER 2016

CONTINUING OPERATIONS

 

Acquisition-

 

Retirement-

 

Related

Related

Operating

GAAP

 

Adjustments*

 

Adjustments**

 

(Non-GAAP)

 

Gross Profit

$

10,893

$

124

$

78

$

11,095

 

Gross Profit Margin

50.0

%

0.6Pts

0.4Pts

51.0

%

 

S,GA

4,976

(136

)

(69

)

4,771

 

R,DE

1,431

– -

(6

)

1,425

 

Other (Income) Expense

(136

)

0

– -

(136

)

 

Total Expense Other (Income)

5,907

(136

)

(76

)

5,696

 

Pre-tax Income from Continuing Operations

4,986

260

154

5,399

 

Pre-tax Income Margin from Continuing Operations

22.9

%

1.2Pts

0.7Pts

24.8

%

 

Provision for Income Taxes***

480

66

77

623

 

Effective Tax Rate

9.6

%

0.8Pts

1.2Pts

11.5

%

 

Income from Continuing Operations

4,505

193

77

4,776

 

Income Margin from Continuing Operations

20.7

%

0.9Pts

0.4Pts

21.9

%

 

Diluted Earnings Per Share: Continuing Operations

$

4.73

$

0.20

$

0.08

$

5.01

 

FOURTH – QUARTER 2015

CONTINUING OPERATIONS

Acquisition-

Retirement-

Related

Related

Operating

GAAP

 

Adjustments*

 

Adjustments**

 

(Non-GAAP)

 

Gross Profit

$

11,407

$

105

$

119

$

11,630

 

Gross Profit Margin

51.7

%

0.5Pts

0.5Pts

52.7

%

 

S,GA

5,157

(95

)

(88

)

4,975

 

R,DE

1,362

– -

(12

)

1,350

 

Other (Income) Expense

(146

)

0

– -

(146

)

 

Total Expense Other (Income)

6,308

(95

)

(100

)

6,114

 

Pre-tax Income from Continuing Operations

5,098

199

218

5,516

 

Pre-tax Income Margin from Continuing Operations

23.1

%

0.9Pts

1.0Pts

25.0

%

 

Provision for Income Taxes***

638

89

82

809

 

Effective Tax Rate

12.5

%

1.2Pts

1.0Pts

14.7

%

 

Income from Continuing Operations

4,460

110

137

4,707

 

Income Margin from Continuing Operations

20.2

%

0.5Pts

0.6Pts

21.3

%

 

Diluted Earnings Per Share: Continuing Operations

$

4.59

$

0.11

$

0.14

$

4.84

* Includes amortization of purchased unsubstantial assets, in
routine RD, separation cost for acquired employees, empty space
for acquired companies, understanding costs and merger formation tax
charges.

** Includes retirement-related seductiveness cost, approaching return
on devise assets, famous actuarial waste or gains, amortization
of transition assets, other settlements, curtailments,
multi-employer skeleton and penury insurance.

*** Tax impact on handling (non-GAAP) pre-tax income from
stability operations is distributed underneath a same accounting
beliefs practical to a As Reported pre-tax income underneath ASC
740, that employs an annual effective taxation rate routine to the
results.

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

U.S. GAAP TO OPERATING (Non-GAAP) RESULTS RECONCILIATION

(Unaudited; Dollars in millions solely per share amounts)

 

TWELVE – MONTHS 2016

 

CONTINUING OPERATIONS

 

Acquisition-

 

Retirement-

 

Related

Related

Operating

GAAP

 

Adjustments*

 

Adjustments**

 

(Non-GAAP)

 

Gross Profit

$

38,294

$

494

$

316

$

39,104

 

Gross Profit Margin

47.9

%

0.6Pts

0.4Pts

48.9

%

 

S,GA

21,069

(501

)

(253

)

20,315

 

R,DE

5,751

– -

(29

)

5,722

 

Other (Income) Expense

145

(7

)

– -

138

 

Total Expense Other (Income)

25,964

(508

)

(282

)

25,174

 

Pre-tax Income from Continuing Operations

12,330

1,003

598

13,931

 

Pre-tax Income Margin from Continuing Operations

15.4

%

1.3Pts

0.7Pts

17.4

%

 

Provision for / (Benefit) from Income Taxes***

449

268

183

900

 

Effective Tax Rate

3.6

%

1.7Pts

1.2Pts

6.5

%

 

Income from Continuing Operations

11,881

735

415

13,031

 

Income Margin from Continuing Operations

14.9

%

0.9Pts

0.5Pts

16.3

%

 

Diluted Earnings Per Share: Continuing Operations

$

12.39

$

0.77

$

0.43

$

13.59

 

TWELVE – MONTHS 2015

CONTINUING OPERATIONS

Acquisition-

Retirement-

Related

Related

Operating

GAAP

 

Adjustments*

 

Adjustments**

 

(Non-GAAP)

 

Gross Profit

$

40,684

$

373

$

469

$

41,526

 

Gross Profit Margin

49.8

%

0.5Pts

0.6Pts

50.8

%

 

S,GA

20,430

(324

)

(533

)

19,573

 

R,DE

5,247

– -

(48

)

5,200

 

Other (Income) Expense

(724

)

(5

)

– -

(729

)

 

Total Expense Other (Income)

24,740

(330

)

(581

)

23,830

 

Pre-Tax Income from Continuing Operations

15,945

703

1,050

17,697

 

Pre-tax Income Margin from Continuing Operations

19.5

%

0.9Pts

1.3Pts

21.6

%

 

Provision for Income Taxes***

2,581

141

316

3,037

 

Effective Tax Rate

16.2

%

0.2Pts

0.9Pts

17.2

%

 

Income from Continuing Operations

13,364

562

734

14,659

 

Income Margin from Continuing Operations

16.3

%

0.7Pts

0.9Pts

17.9

%

 

Diluted Earnings Per Share: Continuing Operations

$

13.60

$

0.57

$

0.75

$

14.92

* Includes amortization of purchased unsubstantial assets, in
routine RD, separation cost for acquired employees, empty space
for acquired companies, understanding costs and merger formation tax
charges.

** Includes retirement-related seductiveness cost, approaching return
on devise assets, famous actuarial waste or gains, amortization
of transition assets, other settlements, curtailments,
multi-employer skeleton and penury insurance.

*** Tax impact on handling (non-GAAP) pre-tax income from
stability operations is distributed underneath a same accounting
beliefs practical to a As Reported pre-tax income underneath ASC
740, that employs an annual effective taxation rate routine to the
results.

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

RECONCILIATION OF OPERATING EARNINGS PER SHARE

(Unaudited)

 

 

 

2017

EPS Guidance

Expectations

IBM GAAP EPS

during slightest $11.95

 

IBM Operating EPS (non-GAAP)

during slightest $13.80

 

 

Adjustments

Acquisition associated charges *

$0.75

Non-Operating Retirement-Related Items

$1.10

 

* Includes acquisitions by Dec 31, 2016

Better Buy: Frontier Communications Corp. vs. Sprint

Frontier (NASDAQ:FTR) and Sprint (NYSE:S) have both struggled to keep adult with bigger players in their spaces.

The wireless conduit has slipped to No. 4 in a four-way competition and, maybe some-more importantly, has mislaid a identity. While T-Mobile (NASDAQ:TMUS) has staked out a place as a choice to a tip dual companies in a space, Sprint has radically turn a “me-too” tender nonetheless an determined niche of a own.

Frontier has also struggled, carrying usually mislaid business given it spent $10.54 billion to buy 3.3 million voice connections, 2.1 million broadband customers, and 1.2 million FiOS video subscribers in California, Texas, and Florida (CTF). Like Sprint, a internet, phone, and wire association lacks an identity, and other than some short-term pricing gimmicks, it too does not offer any constrained reasons for patron adoption.

In deliberation that one competence be a improved buy, we have to demeanour during destiny prospects for both companies. Can possibly code retreat a fortunes, or would one be a some-more appealing merger skill than a other?

Sprintfrontier

Image source: YCharts.com.

The box for Sprint

For a past few years, Sprint has been removing clobbered by T-Mobile. The Un-carrier upheld it for third place among a vast 4 vital wireless carriers and, some-more importantly, staked out a place as a transparent choice for business looking for peculiarity use during a reduce price.

In a many new quarter, though, there have been signs that Sprint’s bid to pull itself as a good value have paid off. In a Q2 2017 earnings release, a association reported a initial year-over-year expansion in handling revenues in some-more than dual years. It also saw a vast burst in postpaid phone net additions going from 62,000 in Q2 2016 to 347,000 for a stream period. Those are enlivening numbers notwithstanding a association still putting adult a net detriment of $142 million.

These numbers advise Sprint competence have incited a corner, and a association expects to shortly lapse to profitability driven by over $1 billion in cost savings. The conduit positively still faces a formidable road, nonetheless it’s maybe a small reduction rough than it was usually a year ago.

The box for Frontier

While we can disagree that Sprint has incited a corner, we can’t make a same box for Frontier. After doubling in distance with a CTF deal, that sealed on Apr 1, a association has been going in a wrong direction. It went from 5.28 million residential subscribers during a finish of Q2 to 5.07 million to tighten Q3. It also forsaken 12,000 business business and mislaid 92,000 video users, as good as 99,000 broadband users. That final series competence be a many unsatisfactory given a attention has been adding broadband subscribers in vast numbers while compensate radio numbers have been declining.

Frontier CEO Dan McCarthy has a devise for a turnaround, and he has been unequivocally assertive about handling costs, achieving $1.4 billion in projected annual savings. But while Sprint has shown during slightest rough success, Frontier’s quip is merely in a fanciful stage. It competence work — and McCarthy has shown that he’s a strong, trained personality — nonetheless zero has been proven yet.

Is Sprint or Frontier a improved buy?

Sprint operates in a marketplace where T-Mobile has shown that restlessness with a marketplace leaders means millions, maybe tens of millions of business are in play. The No. 4 conduit has also shown in a many new entertain that it competence be means to distinction from that rather than losing out to a low-cost rival.

Frontier has a problem in that it does not unequivocally have a differentiated product from a bigger wire and internet providers. It’s an choice choice, nonetheless privately in a wire space, consumers are increasingly selecting between slicing a cord and gripping it, not offered a best cost between pay-TV providers.

The best arguments for shopping Frontier are that a association pays a dividend, and it could be an merger target. It’s tough to disagree in preference of a division when a underlying cost of a batch keeps dropping, nonetheless a association could unequivocally good sell itself during a high premium. That competence not be adequate to make longtime shareholders whole, nonetheless it could be a bonus for people shopping in now.

Sprint could, of course, also get bought — nonetheless it would face incomparable regulatory hurdles — and a shareholders would positively distinction from that. Aside from an merger scenario, though, it’s transparent that Sprint has proven that, during slightest for now, it’s a improved buy. The association has shown that it can supplement subscribers and cut a losses, while Frontier has usually offering adult a plan.

Neither one of these companies are in quite clever positions, nonetheless Sprint has shown that it competence have a future. Frontier has nonetheless to infer that, and until it does, a best play stays offered itself off.

Here’s because we’re not downloading Meitu, a impassioned anime print app (update)

Meitu blazing adult a app store charts, though a formula creates us nervous

The print filter app creates a large dash on amicable media, though some digital forensics experts indicate out some concerning formula function and permissions.

by Ashley Esqueda

Meitu is a viral sensation. Who wouldn’t wish to now give themselves or their favorite politicians and celebs a Japanese-anime desirous makeover, and share a waggish results with a world? That’s since a face-recognizing print app is now rocking a charts.

But before we zip on over to a App Store or Google Play to squeeze your giveaway copy, there’s something we should substantially know: Meitu is seeking for an awful lot of your information in sell for a lolz — and a app also seems to enclose some rather questionable code.

meitu-phone-calls.png

Why does a print app need to make phone calls?


Screenshot by Alfred Ng/CNET

You know how any new app we download asks for accede to access certain tools of your phone? You competence pretty design Meitu, a print app, to use your camera (so it can take pictures), your phone’s storage (so it can revise cinema stored on your phone) and some internet entrance as well.

But Meitu doesn’t stop there. Oh no: It wants your plcae and your phone number, to automatically run itself during startup, and more.

meitu-permissions-android.jpg

Why does a photo-editing app need to make phone calls? Why would it change your audio settings or disaster with other apps regulating on your phone?

And that’s usually a Android version: Jonathan Zdziarski, a confidence researcher who mostly digs into apps like this, has detected some really bizarre lines of formula in a iOS app as well.

According to Zdziarski, a iPhone chronicle of a app is sensitively checking to see either your phone is jailbroken (because that’s not creepy), which mobile carrier you’re using, and is even potentially means to uniquely brand your device regulating a hardware MAC residence of your phone.

Why would it need all that? He speculates that a association is offered your information to companies who’ll aim we with advertising.

It’s not remotely surprising for apps to sell information to advertisers, though an app that could be constantly, sensitively collecting that information (using formula that violates Apple’s rules, according to Zdziarski) even after we reboot your phone, or put in in nap mode… let’s usually contend it raises some remoteness concerns.

There’s still an awful lot we don’t know, including either Meitu is indeed collecting or offered this data. Meitu, Apple and Google didn’t immediately respond to requests for comment.

But until we know for sure, we’re a small bit shaken about downloading Meitu on a possess phones. Perhaps we should be, too.

Update, 3 p.m. PT: FourOctets, a self-described “security pessimist” on Twitter, claims a app is already promulgation your phone’s singular identifier (the IMEI) to mixed servers in China.

According to the company’s remoteness policy, Meitu claims it will usually use your information for a following 5 purposes:

(I) To urge product functionality and ascent user experience, thereby charity improved services for a user;

(II) For temperament verification, confidence control and patron services, so as to safeguard a normal use and confidence of Meitu;

(III) To capacitate Meitu to improved know a interests of a user to assistance Meitu to respond to user’s particular demands;

(IV) Meitu competence use a user’s personal information to prevent, find and examine a practices of fraud, endangering of security, bootleg actions or other control violating a agreement, process or manners between a user and Meitu or a compared parties, so as to strengthen a legitimate rights and interests of Meitu or a compared parties;

(V) To capacitate a user to attend in a surveys of Meitu’s applicable products and services.

However, a association says it can also give divided your information to approve with a law. One of FourOctet’s supporters speculates that Meitu competence be collecting this info to approve with a new Chinese law that requires app makers to singly brand their users and stop them from uploading criminialized content. (China has been cracking down on app stores recently.)

Technically Literate: Original works of brief novella with singular perspectives on tech, exclusively on CNET.

Nintendo Switch hands-on preview: Nintendo’s new games console wants to be your usually one, bridging handheld and TV.

Windows 10 Insider Preview Build 15014 strictly adds ebook support

It’s official: With Windows 10’s Insider Preview Build 15014 for PCs and phones, Microsoft’s strictly non-stop a ebook store, adding some nifty disk- and power-management features, too.

Strategically, the ebook wing of Microsoft’s Store app is substantially a many critical for a company. But you’ll substantially get some-more out of a build’s ability to purify adult your new hoop space, as good as change a opening and energy consumed by specific apps. Unfortunately, not all of we will be means to knowledge a new functionality utterly yet.

Why this matters: Microsoft’s Creators Update, due after this spring, will embody this new ebooks capability as good as a other new utilities. By adding ebook capabilities, Microsoft’s throwing adult some-more than anything else, nonetheless we’re still saying a broad, different set of upgrades to Windows 10.

windows 10 Build 15014 insider energy management Microsoft

Some of we will see this new Power environment on a Windows 10 Taskbar.

Bringing energy government to a forefront

For years, Microsoft tucked divided a choice to reconfigure your PC’s “power plan” within a Control Panel, permitting we to name between a “balanced” devise that prioritized your PCs’s opening and battery life about equally, or practiced it to maximize battery life or performance. But this control (Control Panel Hardware Sound Power Options) melted into a credentials as Windows 10’s Settings became a front page of your PC’s under-the-hood controls. Now, Microsoft’s brought it front and core inside Windows 10’s Taskbar. 

Right now, a slider will seem only on a tiny series of exam PCs, and it won’t even work—Microsoft’s only contrast a user interface. Soon, though, you’ll be means to tweak your PC’s opening quickly without digging by menus. (Note, though, that there’s no denote nonetheless that this will control possibly a new app throttling or a new Game Mode features, both of that have been detected inside new builds.)

Microsoft’s other useful application is what it calls “automatically purify adult space:” a new choice in Settings System Storage Settings that will automatically hunt down and undo proxy complement files and files that have been kept in a Recycle Bin for over 30 days. The choice is off by default, nonetheless it competence spin out to be a accessible approach of clearing confusion in your PC.

Introducing Microsoft’s new eBook Store

As we’ve remarkable before, Microsoft’s personification catch-up with Amazon and other digital booksellers. Instead of adding a dedicated Books app, though, Microsoft is going to use Edge, treating a downloadable ebook like a Web page stored in Edge’s Reading List, for example. PDF and EPUB formats will be supported.

windows Build 15014 insider ebooks Microsoft

Microsoft has launched a new eBooks apportionment of a store within Build 15014 of Windows 10.

Once we squeeze a book from a Store, it will be stored in a Books apportionment of Edge. There, you’ll be means to take advantage of Edge’s pattern options, including Cortana. Microsoft says you’ll be means to use Cortana to conclude difference and benefit additional context, perspective embedded video (if your ebook includes it) and change a rise and rise size. Importantly, you’ll be means to collect adult where we left off and supplement bookmarks, too.

Samsung Confirms Galaxy S8 As Biggest Change Leaks

Recent leaks suggested this will be a pattern to die for, and now have both a best demeanour nonetheless during a Galaxy S8 and Samsung’s central confirmation. So let’s mangle them down…

First adult Samsung has inadvertently reliable a existence of a new phone and a ‘Galaxy S8’ name applying to a United States Patent and Trademark Office to register a new device. Needless to say, a focus any sold “style, size, or color”.

Galaxy S8 renders from box builder MobileFun land with a new leaks. Image credit: MobileFun

But what Samsung couldn’t get around disclosing was a ‘Galaxy S8’ name itself. We’ve prolonged approaching a Galaxy S7 inheritor to be called a Galaxy S8, though given Samsung followed adult a Galaxy Note 5 in 2015 with a Galaxy Note 7 in 2016 and there are doubts about what Apple will call a 2017 iPhone things are not always as elementary as they appear.

Personally we censure Microsoft for this new series jumping materialisation after it leapt from Windows 8 to Windows 10 in 2015. Please no Galaxy S10 subsequent year Samsung!

Samsung’s focus for a Galaxy S8 to a United Stated Patent and Trademark Office. Image credit: Samsung

Secondly after numerous renders of a Galaxy S8 that were formed on measure supposing to mixed box providers, we now have a first look during what is claimed to be a genuine fascias of both a Galaxy S8 and a Galaxy S8 Edge. And it is by distant a biggest transparent change to a range.

Key takeaways are that, like a renders, they also uncover dramatically reduced tip and bottom bezels for a overwhelming new look. This rebate is approaching to concede Samsung to fit most incomparable screens into smartphones that are physically no incomparable than a Galaxy S7 and Galaxy S7 Edge.

Galaxy S8 and Galaxy S8 Edge leaked fascias advise dual overwhelming new smartphones. Image credit: DforDesign

In further to this – unless Samsung is returning to a 2015 3 indication recover plan – both a Galaxy S8 and Galaxy S8 Edge are shown to have winding ‘Edge’ displays. This would make a Edge name rather surplus for a incomparable indication in my opinion (and corner displays do trigger random touches) by a twin will demeanour fantastic.

In fact this is a demeanour Apple is approaching to duplicate with an ‘all bend display’ new iPhone after this year, and we can see why. It is also approaching to lay to rest a idea that Samsung always copies Apple rather than a existence that is everybody steals from everyone.

So with a approaching Galaxy S8 and Galaxy S8 Edge release date removing closer, Samsung has a event to lay down a pen in 2017. With an eye popping Galaxy Note 8 also on a setting this could be an bomb year for Samsung, in all a right ways…

___

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​Uber pays $20M to settle FTC claims it hoodwinked drivers

thenewuberapp04.jpg

Uber allegedly farfetched how many drivers could acquire operative for a ride-hailing service.


Uber

Uber has concluded to palm over $20 million to settle claims that it misled drivers about how many income they could design to make operative for a ride-hailing use and how many it cost to buy or franchise a automobile by a company.

The charges were brought by a Federal Trade Commission on interest of Uber drivers. The FTC will now discharge a $20 million to drivers influenced by Uber’s reportedly fraudulent claims. Additionally, Uber is now taboo from creation false, dubious or unsubstantiated statements about drivers’ income.

“We’re gratified to have reached an agreement with a FTC,” an Uber orator pronounced in an email. “We’ve done many improvements to a motorist knowledge over a final year and will continue to concentration on ensuring that Uber is a best choice for anyone looking to acquire income on their possess schedule.”

Uber is one of a biggest ride-hailing services in a universe with operations in some-more than 450 cities in some-more than 70 countries. More than one million people expostulate for Uber, though a attribute between a association and a drivers isn’t always copacetic. Uber drivers have staged protests, filed lawsuits and uttered their concerns that their compensate is too low.

Uber has pronounced that drivers can make adult to $30 per hour, though many drivers contend they make distant next that number. A Nov study by Jonathan Hall, an Uber worker and shareholder, says that Uber drivers make on normal $20.19 per hour. But in civic areas, like Detroit, Houston and Denver, drivers make reduction than $13.25 per hour on average, according to a Jun report by Buzzfeed News.

The FTC also says drivers make distant reduction than what Uber claims. In a agency’s complaint, it says Uber claimed drivers could make $90,000 per year in New York and $74,000 in San Francisco, when indeed those numbers were lower. The FTC says drivers indeed done on normal $61,000 in New York and $53,000 in San Francisco. The FTC alleges that Uber attempted to captivate in new drivers by exaggerating how many they could earn.

“When Uber’s betrothed gain have not materialized, and drivers have attempted to cancel their automobile agreements, they have incurred poignant financial harm,” a FTC wrote in a complaint. “Uber’s practices have caused a drivers to humour millions of dollars of injury.”

Another member to a FTC’s censure is about Uber’s automobile financing program. The group claims that Uber pronounced it would yield drivers with a “best financing options available” and that they could possess a automobile for as small as $140 per week or franchise a automobile with payments as low as $119 per week.

However, a financing module reportedly incited out to be some-more costly for drivers. Weekly payments for a automobile squeeze averaged some-more than $160 per week and weekly payments for automobile leasing averaged some-more than $200 per week, according to a FTC. For this financing module Uber outsourced to a association named Banco Santander, that it no longer uses.

“Many consumers pointer adult to expostulate for Uber, though they shouldn’t be taken for a float about their gain intensity or a cost of financing a automobile by Uber,” Jessica Rich, executive of a FTC’s Bureau of Consumer Protection, pronounced in a statement. “This allotment will put millions of dollars behind in Uber drivers’ pockets.”