Segments (Tables)

6 Months Ended

Jun. 30, 2015

Segments:

Revenue and Pre-tax Income by Segment

SEGMENT INFORMATION
			Global Services
		Global			Global
		Technology			Business						Systems			Global			Total
(Dollars in millions)		Services			Services			Software			Hardware			Financing			Segments
For the three months
	ended June 30, 2015:
External revenue		$	8,068		$	4,345		$	5,830		$	2,058		$	478		$	20,778
Internal revenue			204			130			770			107			704			1,915
Total revenue		$	8,272		$	4,475		$	6,600		$	2,165		$	1,182		$	22,693
Pre-tax income from
	continuing operations	$	1,248		$	656		$	2,272		$	255		$	613		$	5,044
Revenue year-to-year change			(10.6)	%		(11.9)	%		(10.1)	%		(32.4)	%		(0.6)	%		(13.0)	%
Pre-tax income year-to-year
	change		(25.2)	%		(35.3)	%		(15.3)	%		26.2	%		3.5	%		(18.1)	%
Pre-tax income margin			15.1	%		14.7	%		34.4	%		11.8	%		51.9	%		22.2	%
For the three months
	ended June 30, 2014*:
External revenue		$	9,010		$	4,938		$	6,488		$	3,014		$	504		$	23,955
Internal revenue			247			140			857			190			685			2,119
Total revenue		$	9,257		$	5,078		$	7,345		$	3,204		$	1,189		$	26,074
Pre-tax income from
	continuing operations	$	1,669		$	1,013		$	2,683		$	202		$	593		$	6,160
Pre-tax income margin			18.0	%		20.0	%		36.5	%		6.3	%		49.8	%		23.6	%
* Reclassified to conform with 2015 presentation and to reflect discontinued operations presentation.

SEGMENT INFORMATION
			Global Services
		Global			Global
		Technology			Business						Systems			Global			Total
(Dollars in millions)		Services			Services			Software			Hardware			Financing			Segments
For the six months
	ended June 30, 2015:
External revenue		$	15,953		$	8,663		$	11,028		$	3,717		$	939		$	40,301
Internal revenue			399			261			1,734			199			1,290			3,883
Total revenue		$	16,353		$	8,923		$	12,762		$	3,916		$	2,229		$	44,184
Pre-tax income from
	continuing operations	$	2,242		$	1,253		$	4,208		$	279		$	1,128		$	9,110
Revenue year-to-year change			(10.9)	%		(12.4)	%		(8.4)	%		(29.0)	%		(3.8)	%		(12.2)	%
Pre-tax income year-to-year
	change		(22.3)	%		(29.3)	%		(8.5)	%		nm			(5.1)	%		(10.6)	%
Pre-tax income margin			13.7	%		14.0	%		33.0	%		7.1	%		50.6	%		20.6	%
nm - not meaningful
For the six months
	ended June 30, 2014*:
External revenue		$	17,859		$	9,902		$	12,149		$	5,157		$	1,016		$	46,083
Internal revenue			488			281			1,789			358			1,303			4,218
Total revenue		$	18,346		$	10,183		$	13,939		$	5,515		$	2,318		$	50,301
Pre-tax income/(loss) from
	continuing operations	$	2,885		$	1,772		$	4,601		$	(255)		$	1,188		$	10,191
Pre-tax income margin			15.7	%		17.4	%		33.0	%		(4.6)	%		51.3	%		20.3	%
* Reclassified to conform with 2015 presentation and to reflect discontinued operations presentation.

Segment revenue and pre-tax income reconciliations to total IBM revenue and pre-tax income from continuing operations as reported

Reconciliations to IBM as Reported:
(Dollars in millions)
For the three months ended June 30:		2015		2014*
Revenue:
Total reportable segments		$	22,693	$	26,074
Eliminations of internal transactions			(1,915)		(2,119)
Other revenue adjustments			35		93
	Total consolidated revenue	$	20,813	$	24,047
Pre-tax income from continuing operations:
Total reportable segments		$	5,044	$	6,160
Amortization of acquired intangible assets			(160)		(200)
Acquisition-related charges			(7)		(4)
Non-operating retirement-related (costs)/income			(186)		(52)
Eliminations of internal transactions			(508)		(507)
Unallocated corporate amounts			42		(50)
	Total pre-tax income from continuing operations	$	4,224	$	5,348
* Reclassified to reflect discontinued operations presentation.

Reconciliations to IBM as Reported:
(Dollars in millions)
For the six months ended June 30:		2015		2014*
Revenue:
Total reportable segments		$	44,184	$	50,301
Eliminations of internal transactions			(3,883)		(4,218)
Other revenue adjustments			102		200
	Total consolidated revenue	$	40,403	$	46,283
Pre-tax income from continuing operations:
Total reportable segments		$	9,110	$	10,191
Amortization of acquired intangible assets			(330)		(395)
Acquisition-related charges			(8)		(10)
Non-operating retirement-related (costs)/income			(627)		(175)
Eliminations of internal transactions			(915)		(1,031)
Unallocated corporate amounts			(5)		(50)
	Total pre-tax income from continuing operations	$	7,225	$	8,531
* Reclassified to reflect discontinued operations presentation.