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9 Months Ended

Sep. 30, 2013

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6.Segments: The tables on pages 26 and 27 reflect the results of operations of the company’s segments consistent with the management and measurement system utilized within the company. Performance measurement is based on pre-tax income. These results are used, in part, by senior management, both in evaluating the performance of, and in allocating resources to, each of the segments.

SEGMENT INFORMATION
			Global Services
		Global			Global
		Technology			Business						Systems and			Global			Total
(Dollars in millions)		Services			Services			Software			Technology			Financing			Segments
For the three months
	ended September 30, 2013:
External revenue		$	9,494		$	4,558		$	5,798		$	3,247		$	502		$	23,599
Internal revenue			262			177			744			168			512			1,863
Total revenue		$	9,755		$	4,735		$	6,542		$	3,415		$	1,015		$	25,461
Pre-tax income		$	1,895		$	948		$	2,410		$	(167)		$	494		$	5,579
Revenue year-to-year change			(4.4)	%		0.4	%		(1.0)	%		(16.2)	%		5.3	%		(4.2)	%
Pre-tax income year-to-year
	change		11.7	%		28.4	%		2.3	%		nm			3.8	%		3.5	%
Pre-tax income margin			19.4	%		20.0	%		36.8	%		(4.9)	%		48.7	%		21.9	%
nm - not meaningful
For the three months
	ended September 30, 2012:
External revenue		$	9,922		$	4,542		$	5,763		$	3,895		$	472		$	24,594
Internal revenue			285			175			843			181			491			1,976
Total revenue		$	10,206		$	4,717		$	6,606		$	4,076		$	963		$	26,570
Pre-tax income		$	1,697		$	738		$	2,355		$	124		$	476		$	5,389
Pre-tax income margin			16.6	%		15.6	%		35.6	%		3.0	%		49.4	%		20.3	%

Reconciliations to IBM as Reported:
(Dollars in millions)
For the three months ended September 30:		2013		2012
Revenue:
Total reportable segments		$	25,461	$	26,570
Eliminations of internal transactions			(1,863)		(1,976)
Other revenue adjustments			122		154
	Total IBM Consolidated	$	23,720	$	24,747
Pre-tax income:
Total reportable segments		$	5,579	$	5,389
Amortization of acquired intangible assets			(201)		(178)
Acquisition-related charges			(13)		(10)
Non-operating retirement-related (costs)/income			(257)		(258)
Eliminations of internal transactions			(280)		(322)
Unallocated corporate amounts			(15)		453	*
	Total IBM Consolidated	$	4,812	$	5,074

* Includes Retail Store Solutions divestiture gain of $447 million.

SEGMENT INFORMATION
			Global Services
		Global			Global
		Technology			Business						Systems and			Global			Total
(Dollars in millions)		Services			Services			Software			Technology			Financing			Segments
For the nine months
	ended September 30, 2013:
External revenue		$	28,634		$	13,649		$	17,792		$	10,111		$	1,488		$	71,674
Internal revenue			801			545			2,312			423			1,628			5,710
Total revenue		$	29,435		$	14,194		$	20,105		$	10,533		$	3,116		$	77,383
Pre-tax income		$	4,994		$	2,274		$	6,867		$	(713)		$	1,582		$	15,003
Revenue year-to-year change			(4.5)	%		(1.3)	%		0.6	%		(15.0)	%		4.9	%		(3.9)	%
Pre-tax income year-to-year
	change		1.2	%		6.1	%		1.1	%		nm			4.4	%		(4.1)	%
Pre-tax income margin			17.0	%		16.0	%		34.2	%		(6.8)	%		50.8	%		19.4	%
nm - not meaningful
For the nine months
	ended September 30, 2012:
External revenue		$	29,952		$	13,846		$	17,533		$	11,903		$	1,478		$	74,713
Internal revenue			869			538			2,459			491			1,492			5,848
Total revenue		$	30,821		$	14,384		$	19,992		$	12,394		$	2,970		$	80,561
Pre-tax income		$	4,934		$	2,142		$	6,793		$	253		$	1,516		$	15,637
Pre-tax income margin			16.0	%		14.9	%		34.0	%		2.0	%		51.0	%		19.4	%

Reconciliations to IBM as Reported:
(Dollars in millions)
For the nine months ended September 30:		2013		2012
Revenue:
Total reportable segments		$	77,383	$	80,561
Eliminations of internal transactions			(5,710)		(5,848)
Other revenue adjustments			378		490
	Total IBM Consolidated	$	72,052	$	75,203
Pre-tax income:
Total reportable segments		$	15,003	$	15,637
Amortization of acquired intangible assets			(562)		(517)
Acquisition-related charges			(29)		(24)
Non-operating retirement-related (costs)/income			(803)		(454)
Eliminations of internal transactions			(998)		(949)
Unallocated corporate amounts			(49)		379	*
	Total IBM Consolidated	$	12,562	$	14,071

* Includes Retail Store Solutions divestiture gain of $447 million.