Segments:

9 Months Ended

Sep. 30, 2014

Segments:

Segments:

6.Segments: The tables on pages 28 and 29 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 from continuing operations. 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, 2014:
External revenue		$	9,218		$	4,459		$	5,708		$	2,434		$	487		$	22,305
Internal revenue			252			135			862			182			598			2,029
Total revenue		$	9,470		$	4,594		$	6,570		$	2,616		$	1,084		$	24,334
Pre-tax income/(loss)		$	1,680		$	805		$	2,333		$	(99)		$	475		$	5,195
Revenue year-to-year change			(2.9)	%		(3.0)	%		0.4	%		(13.7)	%		6.9	%		(3.0)	%
Pre-tax income year-to-year
	change		(11.3)	%		(15.0)	%		(3.2)	%		nm	%		(3.7)	%		(9.5)	%
Pre-tax income margin			17.7	%		17.5	%		35.5	%		(3.8)	%		43.9	%		21.3	%
nm - not meaningful
For the three months
	ended September 30, 2013*:
External revenue		$	9,494		$	4,558		$	5,798		$	2,864		$	502		$	23,216
Internal revenue			262			177			744			168			512			1,863
Total revenue		$	9,755		$	4,735		$	6,542		$	3,032		$	1,015		$	25,079
Pre-tax income/(loss)		$	1,895		$	948		$	2,410		$	(8)		$	494		$	5,738
Pre-tax income margin			19.4	%		20.0	%		36.8	%		(0.3)	%		48.7	%		22.9	%

Reconciliations to IBM as Reported:
(Dollars in millions)
For the three months ended September 30:		2014		2013*
Revenue:
Total reportable segments		$	24,334	$	25,079
Eliminations of internal transactions			(2,029)		(1,863)
Other revenue adjustments			92		122
	Total IBM Consolidated	$	22,397	$	23,338
Pre-tax income from continuing operations:
Total reportable segments		$	5,195	$	5,738
Amortization of acquired intangible assets			(201)		(201)
Acquisition-related charges			0		(13)
Non-operating retirement-related (costs)/income			(71)		(257)
Eliminations of internal transactions			(402)		(280)
Unallocated corporate amounts			(160)		(15)
	Total income from continuing operations, before
	income taxes	$	4,361	$	4,972
* Reclassified to reflect discontinued operations presentation.

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, 2014:
External revenue		$	27,962		$	13,476		$	17,857		$	7,590		$	1,502		$	68,387
Internal revenue			739			416			2,652			541			1,900			6,248
Total revenue		$	28,701		$	13,892		$	20,508		$	8,131		$	3,403		$	74,635
Pre-tax income/(loss)		$	4,876		$	2,266		$	6,935		$	(354)		$	1,664		$	15,386
Revenue year-to-year change			(2.5)	%		(2.1)	%		2.0	%		(14.1)	%		9.2	%		(2.2)	%
Pre-tax income year-to-year
	change		(2.4)	%		(0.3)	%		1.0	%		167.1	%		5.2	%		(1.3)	%
Pre-tax income margin			17.0	%		16.3	%		33.8	%		(4.4)	%		48.9	%		20.6	%
For the nine months
	ended September 30, 2013*:
External revenue		$	28,634		$	13,649		$	17,792		$	9,041		$	1,488		$	70,604
Internal revenue			801			545			2,312			423			1,628			5,710
Total revenue		$	29,435		$	14,194		$	20,105		$	9,464		$	3,116		$	76,314
Pre-tax income/(loss)		$	4,994		$	2,274		$	6,867		$	(133)		$	1,582		$	15,583
Pre-tax income margin			17.0	%		16.0	%		34.2	%		(1.4)	%		50.8	%		20.4	%

Reconciliations to IBM as Reported:
(Dollars in millions)
For the nine months ended September 30:		2014		2013*
Revenue:
Total reportable segments		$	74,635	$	76,314
Eliminations of internal transactions			(6,248)		(5,710)
Other revenue adjustments			292		378
	Total IBM Consolidated	$	68,680	$	70,982
Pre-tax income from continuing operations:
Total reportable segments		$	15,386	$	15,583
Amortization of acquired intangible assets			(596)		(562)
Acquisition-related charges			(10)		(29)
Non-operating retirement-related (costs)/income			(246)		(803)
Eliminations of internal transactions			(1,433)		(998)
Unallocated corporate amounts			(209)		(49)
	Total income from continuing operations before
	income taxes	$	12,891	$	13,142
* Reclassified to reflect discontinued operations presentation.