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Announcement:

Moody's says IBM's Aa3 rating not affected by share buyback or dividend increase

Global Credit Research - 24 Apr 2012

New York, April 24, 2012 -- Moody's said that IBM's announcement today that its board authorized an additional $7 billion stock repurchase plan and a thirteen percent increase in its common dividend will not impact the company's Aa3 senior unsecured credit rating and stable outlook.

The company's rating remains supported by the strengthening business profile, which includes "a growing emphasis on higher-margin software and services businesses (87% of total revenue) in lieu of more commoditized hardware offerings," said Moody's Senior Vice President, Richard Lane. The ratings outlook is stable.

"Given IBM's improving revenue mix, we expect its credit metrics and operating performance will improve and remain robust through business cycles," Lane said. The rating also considers IBM's conservative capital structure, robust liquidity profile, and the expectation that it will manage share repurchase activity within the context of its free cash flow generation after considering acquisitions opportunities.

International Business Machines Corp., headquartered in Armonk, New York, is one of the world's leading providers of hardware systems, software and technology related services. IBM has operations in 170 countries and generated $107 billion of revenue for the year ended December 2011.

Richard J. Lane
Senior Vice President
Corporate Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Robert Jankowitz
Associate Managing Director
Corporate Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's says IBM's Aa3 rating not affected by share buyback or dividend increase
No Related Data.

 

© 2013 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

 


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