IBM Corp expressed disappointment that Moody’s Investors Service Inc is considering downgrading its long-term debt rating, and issued a string of reasons why it should retain its rock-solid triple-A rating. We made steady progress in improving our financial results through 1990; our 1991 results have been adversely affected by weak worldwide economic conditions, competitive pressures and transitions within our product line, but that portion of our revenue that is less subject to year-to-year fluctuations – software, rentals, financing and services – has grown significantly from 32% of our total revenue in 1985 to 45% of our revenue through the first nine months of 1991. We believe this adds another layer of financial stability to our results. IBM continues to maintain a strong balance sheet and provide sufficient cash flows to cover interest obligations and dividend payments, it said. Then, shrugging off the development, it added We believe that the impact of Moody’s action on our worldwide financing requirements will be minimal. We are confident that our industry remains an attractive investment and of our ability to achieve an 18% return on equity within the next three years or so. See also Credit Ratings in page 5, inside.
