International Business Machines Corporation · NYSE:IBM

International Business Machines — Q4 2018 Earnings Presentation

11 slides from International Business Machines's earnings presentation, Jan 23, 2019

1. Slide 1: Reconciliation of Operating Earnings Per Share - 2019 Expectations

   Non-GAAP Supplemental Materials Reconciliation of Operating Earnings Per Share 2 2019 Expectations GAAP Diluted EPS at least $12.45 Operating EPS (Non-GAAP) at least $13.90 Adjustments Acquisition-Related Charges* $0.91 Non-Operating Retirement-Related Items $0.45 Tax Reform Enactment Impacts $0.09

2. Slide 2: Reconciliation of Revenue Growth - 4Q & FY 2018 (Geographic)

   Non-GAAP Supplemental Materials Reconciliation of Revenue Growth - 4Q & FY 2018 3 The above reconciles the Non-GAAP financial information contained in the “Geographic Revenue” and “Strategic Imperatives & Geographic Revenue – FY 2018” discussions in the company’s earnings presentation. See Exhibit 9

3. Slide 3: Reconciliation of Revenue Growth - Strategic Imperatives

   Non-GAAP Supplemental Materials Reconciliation of Revenue Growth - 4Q & FY 2018 4 The above reconciles the Non-GAAP financial information contained in the “Strategic Imperatives Revenue” and “Strategic Imperatives and Geographic Revenue – FY 2018” discussions in the company’s earnings presentation.

4. Slide 4: Reconciliation of Revenue Growth - Excluding IBM Z

   Non-GAAP Supplemental Materials Reconciliation of Revenue Growth - 4Q & FY 2018 5 The above reconciles the Non-GAAP financial information contained in the “Strategic Imperatives Revenue” and “Strategic Imperatives and Geographic Revenue – FY 2018” discussions in the company’s earnings presentation.

5. Slide 5: 4Q 2018 Segment Revenue Growth Reconciliation

   Non-GAAP Supplemental Materials Reconciliation of Revenue Growth - 4Q 2018 4Q18 Yr/Yr 6 4Q18 Yr/Yr GAAP @CC GAAP @CC C ognitive Sol utions Fl at 2% T ech Svcs & C l oud Pl atfor m s (3%) Fl at Solutions Software 1% 3% Global Technology Services (4%) (1%) Transaction Processing Software (1%) 1% Infra

6. Slide 6: FY 2018 Segment Revenue Growth Reconciliation

   Non-GAAP Supplemental Materials Reconciliation of Revenue Growth - FY 2018 FY18 Yr/Yr GAAP @CC 7 C og nitiv e S ol utions Fl a t Fl a t Solutions Software 1% Flat Transaction Processing Software (1%) (2%) G l ob a l Bus ines s S er v ices 3 % 2 % Consulting 6% 5% Global Process Services Flat (1%) Ap

7. Slide 7: 4Q 2018 Total Services and Software Revenue

   Non-GAAP Supplemental Materials Reconciliation of Revenue Growth - 4Q 2018 8 4Q18 Yr/Yr GAAP @CC Total Services Revenue (1%) 2% Total Software Revenue Flat 2% The above reconciles the Non-GAAP financial information contained in the “4Q18 Prepared Remarks” discussion in the company’s earnings present

8. Slide 8: Expense Summary

   Non-GAAP Supplemental Materials Reconciliation of Expense Summary - 4Q & FY 2018 9 4Q18 FY18 The above reconciles the Non-GAAP financial information contained in the “Expense Summary” and “ Expense Summary – FY 2018” discussions in the company’s earnings presentation. See Exhibit 99.2 included in th

9. Slide 9: Free Cash Flow Realization - FY 2018

   Non-GAAP Supplemental Materials Reconciliation of Free Cash Flow Realization - FY 2018 10 FY Excluding Tax Reform* FY Free Cash Flow Realization 136% ~111% The above reconciles the Non-GAAP financial information contained in the “Cash Flow and Balance Sheet Highlights” discussion in the company’s ea

10. Slide 10: Reconciliation of Free Cash Flow Realization - FY 2018

    Non-GAAP Supplemental Materials * Reconciliation of Free Cash Flow Realization - FY 2018 FY Excluding FY Tax Reform* Free Cash Flow Realization 136% ~111% The above reconciles the Non-GAAP financial information contained in the “Cash Flow and Balance Sheet Highlights” discussion in the company’s ear

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