EX-99.1 2 ibm-20211020xex99d1.htm EX-99.1

Exhibit 99.1

IBM REPORTS 2021 THIRD-QUARTER RESULTS

Revenue Performance Led by Consulting and Software; Solid Cash Generation

Highlights

Third Quarter:

Revenue of $17.6 billion, up 0.3 percent (down 0.2 percent adjusting for divested businesses and currency)

- Cloud & Cognitive Software up 3 percent (up 2 percent adjusting for currency)

- Global Business Services up 12 percent (up 11 percent adjusting for currency)

Revenue, up 2.5 percent (up 1.9 percent adjusting for divested businesses and currency), normalized to exclude Kyndryl to be separated in November
Net cash from operating activities of $16.1 billion and adjusted free cash flow of $11.1 billion, both up $0.3 billion over last 12 months
Total cloud revenue over last 12 months of $27.8 billion, up 14 percent (up 11 percent adjusting for divested businesses and currency)

- Cloud & Cognitive Software cloud revenue up 31 percent (up 28 percent adjusting for currency)

- Global Business Services cloud revenue up 30 percent (up 27 percent adjusting for currency)

Red Hat revenue up 17 percent, normalized for historical comparability
Debt reduced by $7.0 billion since year-end 2020

ARMONK, N.Y., October 20, 2021 . . . IBM (NYSE: IBM) today announced third-quarter 2021 earnings results.

With the separation of Kyndryl early next month, IBM takes the next step in our evolution as a platform-centric hybrid cloud and AI company," said Arvind Krishna, IBM chairman and chief executive officer. "We continue to make progress in our software and consulting businesses, which represent our higher growth opportunities. With our increased focus and agility to better serve clients, we are confident in achieving our medium-term objectives of mid-single digit revenue growth and strong free cash flow generation.

THIRD QUARTER 2021

All GAAP results include the impact of Kyndryl separation costs*

    

    

    

    

Pre-tax

    

Gross

 

Diluted

Net

Pre-tax

Income

Profit

 

EPS

Income

Income

Margin

Margin

 

GAAP from Continuing Operations

$

1.25

$

1.1B

$

1.3B

 

7.5

%  

46.4

%

Year/Year

 

(34)

%  

 

(33)

%  

 

(28)

%  

(2.9)

Pts

(1.6)

Pts

Operating (Non-GAAP)

$

2.52

$

2.3B

$

2.4B

 

13.6

%  

48.0

%

Year/Year

 

(2)

%  

 

(1)

%  

 

(7)

%  

(1.0)

Pts

(1.0)

Pts

GAAP EPS results include impacts related to the amortization of purchased intangible assets and other acquisition-related charges, retirement-related charges, U.S. tax reform enactment impacts, and transaction costs associated with the Kyndryl separation.

* Impact of Kyndryl separation costs for third quarter 2021 GAAP results: EPS ($0.56) per share; Net Income ($0.5B); Pre-tax Income ($0.3B); Pre-Tax Income Margin (1.6) points; Gross Profit Margin (0.6) points

“We again had solid cash generation for the quarter and over the last year, while maintaining a strong balance sheet and the liquidity to support our hybrid cloud and AI strategy," said James Kavanaugh, IBM senior vice president and chief financial officer. "Our post-separation portfolio mix is shifted toward our growth vectors, with a higher-value recurring revenue stream and strong cash generation, allowing us to continue to invest in the business and provide attractive shareholder returns.


Cash Flow and Balance Sheet

In the third quarter, the company generated net cash from operating activities of $2.7 billion. IBM’s free cash flow was $0.6 billion, which includes $0.6 billion of cash impacts from the company’s structural actions initiated in the fourth quarter of 2020 and the transaction costs associated with the separation of Kyndryl. IBM’s adjusted free cash flow, excluding these cash impacts, was $1.2 billion. The company returned $1.5 billion to shareholders in dividends.

Over the last 12 months, the company generated net cash from operating activities of $16.1 billion. IBM’s free cash flow for the last 12 months was $9.2 billion. The company’s adjusted free cash flow, excluding cash impacts of $1.8 billion for the structural actions and transaction separation costs, was $11.1 billion.

IBM ended the third quarter with $8.4 billion of cash on hand (includes marketable securities), down $5.9 billion from year-end 2020 reflecting acquisitions of $3.0 billion and debt reduction payments. Debt, including Global Financing debt of $15.9 billion, totaled $54.5 billion, down $7.0 billion since the end of 2020, and down $18.5 billion since closing the Red Hat acquisition.

Segment Results for Third Quarter

Cloud & Cognitive Software (includes Cloud & Data Platforms, Cognitive Applications and Transaction Processing Platforms) — revenues of $5.7 billion, up 2.5 percent (up 1.9 percent adjusting for currency). Cloud & Data Platforms grew 10 percent (up 9 percent adjusting for currency), Cognitive Applications revenue was flat (down 1 percent adjusting for currency) and Transaction Processing Platforms declined 9 percent. Cloud revenue up 21 percent (up 20 percent adjusting for currency).
Global Business Services (includes Consulting, Application Management and Global Process Services) — revenues of $4.4 billion, up 11.6 percent (up 11.0 percent adjusting for currency), with growth in Consulting, up 17 percent (up 16 percent adjusting for currency), Application Management up 5 percent, and Global Process Services up 19 percent. Cloud revenue up 38 percent (up 37 percent adjusting for currency).
Global Technology Services (includes Infrastructure & Cloud Services and Technology Support Services) — revenues of $6.2 billion, down 4.8 percent (down 5.4 percent adjusting for currency). Infrastructure & Cloud Services declined 5 percent (down 6 percent adjusting for currency) and Technology Support Services declined 4 percent (down 5 percent adjusting for currency). Cloud revenue up 1 percent (flat adjusting for currency). Gross profit margin up 120 basis points.
Systems (includes Systems Hardware and Operating Systems Software) — revenues of $1.1 billion, down 11.9 percent (down 12.4 percent adjusting for currency), driven by declines in IBM Z (down 33 percent) and Power systems down 24 percent (down 25 percent adjusting for currency). Storage Systems grew 11 percent. Cloud revenue down 42 percent (down 43 percent adjusting for currency).
Global Financing (includes financing and used equipment sales) — revenues of $220 million, down 19.2 percent (down 19.8 percent adjusting for currency).

Year-To-Date 2021 Results

Revenues for the nine-month period ended September 30, 2021 totaled $54.1 billion, an increase of 1.6 percent year to year (down 1 percent adjusting for divested businesses and currency) compared with $53.3 billion for the first nine months of 2020. Net income was $3.4 billion, down 19 percent year to year, reflecting the impact of $0.7 billion of transaction costs associated with the Kyndryl separation. Diluted earnings per share was $3.77 compared with $4.72 per diluted share for the 2020 period, a decrease of 20 percent.

GAAP earnings per share results include a ($2.85) per-share impact for charges related to amortization of purchased intangible assets and other acquisition-related charges, retirement-related charges, U.S. tax reform enactment impacts, and transaction costs associated with the Kyndryl separation. The impact of the Kyndryl separation costs was ($0.76) per share.


Operating (non-GAAP) net income for the nine months ended September 30, 2021 was $6.0 billion compared with $5.9 billion in the prior-year period, an increase of 1.3 percent. Operating (non-GAAP) diluted earnings per share from continuing operations was $6.62 compared with $6.60 per diluted share for the 2020 period, flat year to year.

Forward-Looking and Cautionary Statements

Except for the historical information and discussions contained herein, statements contained in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on the company’s current assumptions regarding future business and financial performance. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially, including, but not limited to, the following: a downturn in economic environment and client spending budgets; a failure of the company’s innovation initiatives; damage to the company’s reputation; risks from investing in growth opportunities; failure of the company’s intellectual property portfolio to prevent competitive offerings and the failure of the company to obtain necessary licenses; the possibility that the proposed separation of the managed infrastructure services unit of the company’s Global Technology Services segment will not be completed within the anticipated time period or at all, the possibility of disruption or unanticipated costs in connection with the proposed separation or the possibility that the separation will not achieve its intended benefits; the company’s ability to successfully manage acquisitions, alliances and dispositions, including integration challenges, failure to achieve objectives, the assumption of liabilities, and higher debt levels; fluctuations in financial results; impact of local legal, economic, political, health and other conditions; the company’s failure to meet growth and productivity objectives; ineffective internal controls; the company’s use of accounting estimates; impairment of the company’s goodwill or amortizable intangible assets; the company’s ability to attract and retain key employees and its reliance on critical skills; impacts of relationships with critical suppliers; product quality issues; impacts of business with government clients; reliance on third party distribution channels and ecosystems; cybersecurity and data privacy considerations; adverse effects from environmental matters, tax matters; legal proceedings and investigatory risks; the company’s pension plans; currency fluctuations and customer financing risks; impact of changes in market liquidity conditions and customer credit risk on receivables; risk factors related to IBM securities; and other risks, uncertainties and factors discussed in the company’s Form 10-Qs, Form 10-K and in the company’s other filings with the U.S. Securities and Exchange Commission or in materials incorporated therein by reference. Any forward-looking statement in this release speaks only as of the date on which it is made. Except as required by law, the company assumes no obligation to update or revise any forward-looking statements.

Presentation of Information in this Press Release

In an effort to provide investors with additional information regarding the company’s results as determined by generally accepted accounting principles (GAAP), the company has also disclosed in this press release the following non-GAAP information, which management believes provides useful information to investors:

IBM results —

adjusting for currency (i.e., at constant currency);
total revenue and cloud revenue adjusting for divested businesses and currency;
total revenue normalized to exclude Kyndryl to be separated in November;
Red Hat revenue normalized for historical comparability;
presenting operating (non-GAAP) earnings per share amounts and related income statement items;
free cash flow;
adjusted free cash flow.


The rationale for management’s use of these non-GAAP measures is included in Exhibit 99.2 in the Form 8-K that includes this press release and is being submitted today to the SEC.

Conference Call and Webcast

IBM’s regular quarterly earnings conference call is scheduled to begin at 5:00 p.m. EDT, today. The Webcast may be accessed via a link at https://www.ibm.com/investor/events/earnings-3q21. Presentation charts will be available shortly before the Webcast.

Financial Results Below (certain amounts may not add due to use of rounded numbers; percentages presented are calculated from the underlying whole-dollar amounts).

Contact:

IBM

Sarah Meron, 347-891-1770

sarah.meron@ibm.com

Tim Davidson, 914-844-7847

tfdavids@us.ibm.com


INTERNATIONAL BUSINESS MACHINES CORPORATION

COMPARATIVE FINANCIAL RESULTS

(Unaudited; Dollars in millions except per share amounts)

Three Months Ended

 

Nine Months Ended

 

September 30, 

 

September 30, 

 

    

2021

    

2020

 

2021

    

2020

 

REVENUE

 

  

 

  

  

 

  

Cloud & Cognitive Software

$

5,692

$

5,553

$

17,227

$

16,540

Global Business Services

 

4,427

 

3,965

 

13,002

 

11,992

Global Technology Services

 

6,154

 

6,462

 

18,866

 

19,245

Systems

 

1,107

 

1,257

 

4,251

 

4,477

Global Financing

 

220

 

273

 

702

 

837

Other

 

18

 

50

 

45

 

163

TOTAL REVENUE

 

17,618

 

17,560

 

54,093

 

53,253

GROSS PROFIT

 

8,171

 

8,430

 

25,379

 

25,052

GROSS PROFIT MARGIN

 

 

 

 

Cloud & Cognitive Software

 

77.0

%

 

77.1

%

 

77.1

%  

 

76.6

%

Global Business Services

 

29.8

%

 

32.9

%

 

28.6

%  

 

29.5

%

Global Technology Services

 

36.2

%

 

35.0

%

 

35.3

%  

 

34.4

%

Systems

 

41.3

%

 

51.2

%

 

51.3

%  

 

53.7

%

Global Financing

 

25.6

%

 

37.5

%

 

28.4

%  

 

39.0

%

TOTAL GROSS PROFIT MARGIN

 

46.4

%  

 

48.0

%

 

46.9

%  

 

47.0

%

EXPENSE AND OTHER INCOME

 

 

  

 

  

 

  

S,G&A

 

4,860

 

4,647

 

15,368

 

15,849

R,D&E

 

1,621

 

1,515

 

4,907

 

4,722

Intellectual property and custom development income

 

(153)

 

(134)

 

(435)

 

(453)

Other (income) and expense

 

234

 

253

 

911

 

614

Interest expense

 

291

 

323

 

852

 

971

TOTAL EXPENSE AND OTHER INCOME

 

6,852

 

6,603

 

21,603

 

21,704

INCOME/(LOSS) FROM CONTINUING OPERATIONS

 

 

 

 

BEFORE INCOME TAXES

 

1,319

 

1,827

 

3,776

 

3,348

Pre-tax margin

 

7.5

%  

 

10.4

%

 

7.0

%  

 

6.3

%

Provision for/(Benefit from) income taxes

 

188

 

128

 

365

 

(888)

Effective tax rate

 

14.3

%  

 

7.0

%

 

9.7

%  

 

(26.5)

%

INCOME FROM CONTINUING OPERATIONS

$

1,130

$

1,698

$

3,411

$

4,237

DISCONTINUED OPERATIONS

 

 

 

 

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

 

 

(1)

 

(1)

 

(2)

NET INCOME

$

1,130

$

1,698

$

3,410

$

4,234

EARNINGS/(LOSS) PER SHARE OF COMMON STOCK

 

 

  

 

  

 

  

Assuming Dilution

 

 

  

 

  

 

  

Continuing Operations

$

1.25

$

1.89

$

3.77

$

4.72

Discontinued Operations

$

0.00

$

0.00

$

0.00

$

0.00

TOTAL

$

1.25

$

1.89

$

3.77

$

4.72

Basic

 

 

 

 

Continuing Operations

$

1.26

$

1.90

$

3.81

$

4.76

Discontinued Operations

$

0.00

$

0.00

$

0.00

$

0.00

TOTAL

$

1.26

$

1.90

$

3.81

$

4.76

WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (M’s)

 

 

 

 

Assuming Dilution

 

906.0

 

897.3

 

904.0

 

895.8

Basic

 

897.1

 

891.4

 

895.3

 

889.6


INTERNATIONAL BUSINESS

MACHINES CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEET

(Unaudited)

    

At

    

At

September 30, 

December 31, 

(Dollars in Millions)

2021

2020

ASSETS:

 

  

 

  

Current Assets:

 

  

 

  

Cash and cash equivalents

$

7,455

$

13,212

Restricted cash

 

352

 

463

Marketable securities

 

600

 

600

Notes and accounts receivable - trade, net

 

6,609

 

7,132

Short-term financing receivables, net

 

7,161

 

10,892

Other accounts receivable, net

 

899

 

714

Inventories

 

1,891

 

1,839

Deferred costs

 

2,046

 

2,107

Prepaid expenses and other current assets

 

2,954

 

2,206

Total Current Assets

 

29,967

 

39,165

Property, plant and equipment, net

 

9,138

 

10,040

Operating right-of-use assets, net

 

4,253

 

4,686

Long-term financing receivables, net

 

5,046

 

7,086

Prepaid pension assets

 

8,197

 

7,610

Deferred costs

 

2,248

 

2,449

Deferred taxes

 

8,967

 

9,241

Goodwill

 

61,378

 

59,617

Intangibles, net

13,025

13,796

Investments and sundry assets

 

1,996

 

2,282

Total Assets

$

144,214

$

155,971

LIABILITIES:

 

  

 

  

Current Liabilities:

 

  

 

  

Taxes

$

2,159

$

3,301

Short-term debt

 

7,575

 

7,183

Accounts payable

 

4,248

 

4,908

Deferred income

 

12,264

 

12,833

Operating lease liabilities

 

1,285

 

1,357

Other liabilities

 

8,300

 

10,287

Total Current Liabilities

 

35,832

 

39,869

Long-term debt

 

46,926

 

54,355

Retirement related obligations

 

16,764

 

18,248

Deferred income

 

3,965

 

4,301

Operating lease liabilities

 

3,192

 

3,574

Other liabilities

 

15,179

 

14,897

Total Liabilities

 

121,858

 

135,244

EQUITY:

 

 

  

IBM Stockholders’ Equity:

 

 

  

Common stock

 

57,189

 

56,556

Retained earnings

 

161,747

 

162,717

Treasury stock — at cost

 

(169,406)

 

(169,339)

Accumulated other comprehensive income/(loss)

 

(27,302)

 

(29,337)

Total IBM Stockholders’ Equity

 

22,228

 

20,597

Noncontrolling interests

 

129

 

129

Total Equity

 

22,357

 

20,727

Total Liabilities and Equity

$

144,214

$

155,971


INTERNATIONAL BUSINESS MACHINES CORPORATION

CASH FLOW ANALYSIS

(Unaudited)

Trailing Twelve

Three Months Ended

Nine Months Ended

 

Months Ended

September 30, 

September 30, 

 

September 30,

(Dollars in Millions)

2021

    

2020

    

2021

    

2020

 

2021

Net Cash Provided by Operating Activities per GAAP:

$

2,713

$

4,286

$

10,252

$

12,337

$

16,111

Less: Change in Global Financing (GF) Receivables

 

1,472

2,353

 

5,235

5,324

4,260

Capital Expenditures, net

 

(638)

(829)

 

(1,855)

(2,262)

(2,635)

Free Cash Flow

 

603

1,104

 

3,162

4,751

9,216

Structural actions initiated in 4Q20 & Separation charges (1)

 

566

 

1,792

1,841

Adjusted Free Cash Flow

 

1,170

1,104

 

4,954

4,751

11,057

Free Cash Flow

 

603

1,104

 

3,162

4,751

9,216

Acquisitions

 

(152)

(17)

 

(3,018)

(37)

(3,317)

Divestitures

 

51

(248)

 

26

510

19

Dividends

 

(1,471)

(1,453)

 

(4,395)

(4,343)

(5,850)

Non-GF Debt

 

1,187

1,019

 

(1,143)

4,977

(5,899)

Other (includes GF Net Receivables and GF Debt)

 

22

1,098

 

(500)

886

(1,516)

Change in Cash, Cash Equivalents, Restricted Cash and Short-term Marketable Securities

$

241

$

1,503

$

(5,868)

$

6,744

$

(7,347)


(1) Includes cash impacts incurred in the period related to structural actions initiated in 4Q20 and separation related costs.


INTERNATIONAL BUSINESS MACHINES CORPORATION

CASH FLOW

(Unaudited)

Three Months Ended

Nine Months Ended

September 30, 

September 30, 

(Dollars in Millions)

2021

    

2020

    

2021

    

2020

Net Income from Operations

$

1,130

$

1,698

$

3,410

$

4,234

Depreciation/Amortization of Intangibles

 

1,684

 

1,683

 

5,036

 

4,996

Stock-based Compensation

 

262

 

222

 

719

 

658

Working Capital / Other

 

(1,834)

 

(1,670)

 

(4,147)

 

(2,874)

Global Financing A/R

 

1,472

 

2,353

 

5,235

 

5,324

Net Cash Provided by Operating Activities

$

2,713

$

4,286

$

10,252

$

12,337

Capital Expenditures, net of payments & proceeds

 

(638)

 

(829)

 

(1,855)

 

(2,262)

Divestitures, net of cash transferred

 

51

 

(248)

 

26

 

510

Acquisitions, net of cash acquired

 

(152)

 

(17)

 

(3,018)

 

(37)

Marketable Securities / Other Investments, net

 

109

 

762

 

(453)

 

(680)

Net Cash Provided by/(Used in) Investing Activities

$

(629)

$

(332)

$

(5,300)

$

(2,470)

Debt, net of payments & proceeds

 

(287)

 

(252)

 

(6,086)

 

1,067

Dividends

 

(1,471)

 

(1,453)

 

(4,395)

 

(4,343)

Common Stock Transactions - Other

 

9

 

16

 

(181)

 

(152)

Net Cash Provided by/(Used in) Financing Activities

$

(1,748)

$

(1,689)

$

(10,662)

$

(3,428)

Effect of Exchange Rate changes on Cash

 

(94)

 

101

 

(159)

 

(200)

Net Change in Cash, Cash Equivalents and Restricted Cash

$

241

$

2,366

$

(5,868)

$

6,239


INTERNATIONAL BUSINESS MACHINES CORPORATION

SEGMENT DATA

(Unaudited)

Three Months Ended September 30, 2021

 

    

Cloud &

    

Global

    

Global

    

    

 

Cognitive

Business

Technology

Global

 

(Dollars in Millions)

Software

Services

Services

Systems

Financing

 

Revenue

 

  

 

  

 

  

 

  

 

  

External

$

5,692

$

4,427

$

6,154

$

1,107

$

220

Internal

 

764

 

53

 

317

 

176

 

153

Total Segment Revenue

$

6,456

$

4,480

$

6,471

$

1,283

$

373

Pre-tax Income/(Loss) from Continuing Operations

 

1,675

 

587

 

383

 

(207)

 

206

Pre-tax Margin

 

25.9

%  

 

13.1

%  

 

5.9

%  

 

(16.1)

%  

 

55.1

%

Change YTY Revenue - External

 

2.5

%  

 

11.6

%  

 

(4.8)

%  

 

(11.9)

%  

 

(19.2)

%

Change YTY Revenue - External @constant currency

 

1.9

%  

 

11.0

%  

 

(5.4)

%  

 

(12.4)

%  

 

(19.8)

%

Three Months Ended September 30, 2020

 

    

Cloud &

    

Global

    

Global

    

    

 

Cognitive

Business

Technology

Global

 

(Dollars in Millions)

Software

Services

Services

Systems

Financing

 

Revenue

 

  

 

  

 

  

 

  

 

  

External

$

5,553

$

3,965

$

6,462

$

1,257

$

273

Internal

 

875

 

49

 

312

 

240

 

208

Total Segment Revenue

$

6,428

$

4,014

$

6,774

$

1,497

$

480

Pre-tax Income/(Loss) from Continuing Operations

 

1,834

 

570

 

399

 

(37)

 

196

Pre-tax Margin

 

28.5

%  

 

14.2

%  

 

5.9

%  

 

(2.5)

%  

 

40.7

%


INTERNATIONAL BUSINESS MACHINES CORPORATION

SEGMENT DATA

(Unaudited)

Nine Months Ended September 30, 2021

 

    

Cloud &

    

Global

    

Global

    

    

 

Cognitive

Business

Technology

Global

 

(Dollars in Millions)

Software

Services

Services

Systems

Financing

 

Revenue

 

  

 

  

 

  

 

  

 

  

External

$

17,227

$

13,002

$

18,866

$

4,251

$

702

Internal

 

2,322

 

166

 

956

 

606

 

581

Total Segment Revenue

$

19,549

$

13,168

$

19,822

$

4,857

$

1,283

Pre-tax Income/(Loss) from Continuing Operations

 

4,822

 

1,349

 

903

 

(33)

 

618

Pre-tax Margin

 

24.7

%  

 

10.2

%  

 

4.6

%  

 

(0.7)

%  

 

48.1

%

Change YTY Revenue - External

 

4.2

%  

 

8.4

%  

 

(2.0)

%  

 

(5.1)

%  

 

(16.2)

%

Change YTY Revenue - External @constant currency

 

1.7

%  

 

5.5

%  

 

(4.9)

%  

 

(7.0)

%  

 

(18.0)

%

Nine Months Ended September 30, 2020

 

    

Cloud &

    

Global

    

Global

    

    

 

Cognitive

Business

Technology

Global

 

(Dollars in Millions)

Software

Services

Services

Systems

Financing

 

Revenue

 

  

 

  

 

  

 

  

 

  

External

$

16,540

$

11,992

$

19,245

$

4,477

$

837

Internal

 

2,431

 

150

 

911

 

628

 

660

Total Segment Revenue

$

18,971

$

12,142

$

20,155

$

5,106

$

1,497

Pre-tax Income/(Loss) from Continuing Operations

 

4,475

 

1,203

 

471

 

(7)

 

566

Pre-tax Margin

 

23.6

%  

 

9.9

%  

 

2.3

%  

 

(0.1)

%  

 

37.8

%


INTERNATIONAL BUSINESS MACHINES CORPORATION

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

(Unaudited; Dollars in millions except per share amounts)

Three Months Ended September 30, 2021

 

Continuing Operations

 

    

    

Acquisition-

    

Retirement-

    

Tax

    

Separation-

    

 

Related

Related

Reform

Related

Operating

 

GAAP

Adjustments (1)

Adjustments (2)

Impacts

Charges (4)

(Non-GAAP)

 

Gross Profit

$

8,171

$

184

$

$

$

108

$

8,463

Gross Profit Margin

 

46.4

%  

 

1.0

Pts

Pts

Pts

0.6

Pts

 

48.0

%

S,G&A

 

4,860

 

(293)

(169)

 

4,398

R,D&E

 

1,621

 

(1)

 

1,620

Other (Income) & Expense

 

234

 

(1)

(328)

 

(94)

Interest Expense

 

291

 

 

291

Total Expense & Other (Income)

 

6,852

 

(294)

(328)

(169)

 

6,061

Pre-tax Income from Continuing Operations

 

1,319

 

478

328

277

 

2,402

Pre-tax Income Margin from Continuing Operations

 

7.5

%  

 

2.7

Pts

1.9

Pts

Pts

1.6

Pts

 

13.6

%

Provision for/(Benefit from) Income Taxes (3)

 

188

 

103

57

(233)

 

115

Effective Tax Rate

 

14.3

%  

 

1.5

Pts

0.4

Pts

Pts

(11.4)

Pts

 

4.8

%

Income from Continuing Operations

 

1,130

 

375

271

510

 

2,286

Income Margin from Continuing Operations

 

6.4

%  

 

2.1

Pts

1.5

Pts

Pts

2.9

Pts

 

13.0

%

Diluted Earnings/(Loss) Per Share: Continuing Operations

$

1.25

$

0.41

$

0.30

$

$

0.56

$

2.52

Three Months Ended September 30, 2020

Continuing Operations

    

    

Acquisition-

    

Retirement-

    

Tax

Separation-

    

Related

Related

Reform

Related

Operating

GAAP

Adjustments (1)

Adjustments (2)

Impacts

    

Charges (4)

    

(Non-GAAP)