Segments:

6 Months Ended

Jun. 30, 2014

Segments:

Segments:

6.Segments: The tables on pages 27 and 28 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 June 30, 2014:
External revenue		$	9,414		$	4,534		$	6,488		$	3,331		$	504		$	24,271
Internal revenue			247			140			857			190			685			2,119
Total revenue		$	9,661		$	4,674		$	7,345		$	3,521		$	1,189		$	26,390
Pre-tax income		$	1,850		$	832		$	2,683		$	25		$	593		$	5,983
Revenue year-to-year change			(1.7)	%		(2.5)	%		2.6	%		(9.5)	%		12.0	%		(1.3)	%
Pre-tax income year-to-year
	change		22.2	%		33.7	%		9.8	%		117.9	%		7.7	%		19.9	%
Pre-tax income margin			19.2	%		17.8	%		36.5	%		0.7	%		49.8	%		22.7	%
For the three months
	ended June 30, 2013:
External revenue		$	9,536		$	4,606		$	6,423		$	3,758		$	487		$	24,809
Internal revenue			292			188			738			135			575			1,928
Total revenue		$	9,828		$	4,795		$	7,161		$	3,893		$	1,061		$	26,737
Pre-tax income		$	1,514		$	623		$	2,443		$	(141)		$	550		$	4,989
Pre-tax income margin			15.4	%		13.0	%		34.1	%		(3.6)	%		51.8	%		18.7	%

Reconciliations to IBM as Reported:
(Dollars in millions)
For the three months ended June 30:		2014		2013
Revenue:
Total reportable segments		$	26,390	$	26,737
Eliminations of internal transactions			(2,119)		(1,928)
Other revenue adjustments			93		115
	Total IBM Consolidated	$	24,364	$	24,924
Pre-tax income:
Total reportable segments		$	5,983	$	4,989
Amortization of acquired intangible assets			(200)		(178)
Acquisition-related charges			(4)		(4)
Non-operating retirement-related (costs)/income			(52)		(262)
Eliminations of internal transactions			(507)		(379)
Unallocated corporate amounts			(50)		(22)
	Total IBM Consolidated	$	5,171	$	4,144

SEGMENT INFORMATION
			Global Services
		Global			Global
		Technology			Business						Systems and			Global			Total
(Dollars in millions)		Services			Services			Software			Technology			Financing			Segments
For the six months
	ended June 30, 2014:
External revenue		$	18,744		$	9,017		$	12,149		$	5,722		$	1,016		$	46,648
Internal revenue			488			281			1,789			358			1,303			4,218
Total revenue		$	19,232		$	9,298		$	13,939		$	6,080		$	2,318		$	50,866
Pre-tax income		$	3,196		$	1,461		$	4,601		$	(635)		$	1,188		$	9,812
Revenue year-to-year change			(2.3)	%		(1.7)	%		2.8	%		(14.6)	%		10.3	%		(2.0)	%
Pre-tax income year-to-year
	change		3.1	%		10.2	%		3.2	%		16.3	%		9.2	%		4.1	%
Pre-tax income margin			16.6	%		15.7	%		33.0	%		(10.4)	%		51.3	%		19.3	%
nm - not meaningful
For the six months
	ended June 30, 2013:
External revenue		$	19,140		$	9,091		$	11,995		$	6,864		$	985		$	48,075
Internal revenue			540			368			1,569			255			1,116			3,847
Total revenue		$	19,680		$	9,459		$	13,563		$	7,118		$	2,101		$	51,922
Pre-tax income		$	3,099		$	1,326		$	4,457		$	(546)		$	1,088		$	9,425
Pre-tax income margin			15.7	%		14.0	%		32.9	%		(7.7)	%		51.8	%		18.2	%

Reconciliations to IBM as Reported:
(Dollars in millions)
For the six months ended June 30:		2014		2013
Revenue:
Total reportable segments		$	50,866	$	51,922
Eliminations of internal transactions			(4,218)		(3,847)
Other revenue adjustments			200		257
	Total IBM Consolidated	$	46,848	$	48,332
Pre-tax income:
Total reportable segments		$	9,812	$	9,425
Amortization of acquired intangible assets			(395)		(361)
Acquisition-related charges			(10)		(15)
Non-operating retirement-related (costs)/income			(175)		(546)
Eliminations of internal transactions			(1,031)		(718)
Unallocated corporate amounts			(50)		(35)
	Total IBM Consolidated	$	8,151	$	7,750