Item 7.01. Regulation FD Disclosure.
Exhibit 99.1 of this Form 8-K contains the prepared remarks for IBMs Chief Financial Officer Jim Kavanaughs third-quarter 2018 earnings presentation to investors on October 16, 2018.
Reconciliations of non-GAAP financial measures discussed in the earnings presentation to the most directly comparable financial measures calculated and presented in accordance with GAAP are included as Exhibit 99.2 of this Form 8-K. The slides used in Mr. Kavanaughs third-quarter 2018 earnings presentation are Exhibit 99.3 to the companys Form 8-K submitted to the SEC on October 16, 2018.
The information in this Item 7.01, including the corresponding Exhibits 99.1 and 99.2, is being furnished with the Commission and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 (the Exchange Act), with the exception of the following information from the question and answer period of the earnings presentation, which has been edited to provide additional context and clarity, and shall be deemed filed under the Exchange Act:
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At mid-October spot rates, the company expects a 0 to 1 point currency benefit to full-year 2018 revenue growth, including a 2 point currency headwind in the fourth quarter.
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At mid-October spot rates, the company continues to expect full-year revenue growth.
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The company expects average seasonality (of the last 3 to 5 years) for revenue performance from the third quarter to fourth quarter.
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The company expects modest growth in total software revenue at constant currency in the fourth quarter.
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With enterprise productivity, the company expects pre-tax margin expansion in the fourth quarter.
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In services, with respect to signings, the company has a strong pipeline of deals greater than $100 million lined up in the fourth quarter.
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Free cash flow realization, which is defined as free cash flow to income from continuing operations (GAAP), is expected to be over 100% for the year, driven by sales cycle working capital, pension and capital expenditures (net of depreciation/amortization), mitigated by income taxes.
Forward-Looking Statements
Certain statements contained in this Form 8-K may be characterized as forward-looking under the Private Securities Litigation Reform Act of 1995. These statements involve a number of factors that could cause actual results to differ materially. Additional information concerning these factors is contained in the Companys filings with the U.S. Securities and Exchange Commission (SEC). Copies are available from the SEC or from the IBM web site (www.ibm.com).