SEGMENT INFORMATION (Tables)

12 Months Ended

Dec. 31, 2017

SEGMENT INFORMATION

Revenue and Pre-tax Income by Segment

($ in millions)

							Technology
				Global			Services &
	Cognitive			Business			Cloud						Global			Total
For the year ended December 31:	Solutions			Services			Platforms			Systems			Financing			Segments
2017
External revenue	$	18,453		$	16,348		$	34,277		$	8,194		$	1,696		$	78,968
Internal revenue	2,647			363			657			750			1,471			5,889
Total revenue	$	21,100		$	16,711		$	34,934		$	8,945		$	3,168		$	84,857
Pre-tax income from continuing operations	$	6,817		$	1,401		$	4,344		$	1,135		$	1,279		$	14,977
Revenue year-to-year change	1.4		%	(2.3		)%	(3.1		)%	5.7		%	(9.3		)%	(1.3		)%
Pre-tax income year-to-year change	7.3		%	(19.1		)%	(7.7		)%	21.6		%	(22.7		)%	(2.6		)%
Pre-tax income margin	32.3		%	8.4		%	12.4		%	12.7		%	40.4		%	17.6		%
2016
External revenue	$	18,187		$	16,700		$	35,337		$	7,714		$	1,692		$	79,630
Internal revenue	2,630			409			715			750			1,802			6,307
Total revenue	$	20,817		$	17,109		$	36,052		$	8,464		$	3,494		$	85,936
Pre-tax income from continuing operations	$	6,352		$	1,732		$	4,707		$	933		$	1,656		$	15,380
Revenue year-to-year change	3.8		%	(3.1		)%	0.6		%	(18.0		)%	(22.0		)%	(2.7		)%
Pre-tax income year-to-year change	(12.3		)%	(33.4		)%	(17.0		)%	(45.8		)%	(29.9		)%	(21.5		)%
Pre-tax income margin	30.5		%	10.1		%	13.1		%	11.0		%	47.4		%	17.9		%
2015
External revenue	$	17,841		$	17,166		$	35,142		$	9,547		$	1,840		$	81,535
Internal revenue	2,215			499			698			778			2,637			6,826
Total revenue	$	20,055		$	17,664		$	35,840		$	10,325		$	4,477		$	88,361
Pre-tax income from continuing operations	$	7,245		$	2,602		$	5,669		$	1,722		$	2,364		$	19,602
Revenue year-to-year change	(8.4		)%	(11.9		)%	(9.8		)%	(22.4		)%	(1.0		)%	(11.2		)%
Pre-tax income year-to-year change	(11.8		)%	(22.3		)%	(20.0		)%	24.4		%	8.0		%	(11.8		)%
Pre-tax income margin	36.1		%	14.7		%	15.8		%	16.7		%	52.8		%	22.2		%

Reconciliation of segment revenue to IBM as reported

($ in millions)

For the year ended December 31:	2017			2016			2015
Revenue
Total reportable segments	$	84,857		$	85,936		$	88,361
Other revenue	171			289			206
Elimination of internal transactions	(5,889		)	(6,307		)	(6,826		)
Total IBM consolidated revenue	$	79,139		$	79,919		$	81,741

Reconciliation of segment pre-tax income to IBM as reported

($ in millions)

For the year ended December 31:	2017			2016			2015
Pre-tax income from continuing operations
Total reportable segments	$	14,977		$	15,380		$	19,602
Amortization of acquired intangible assets	(945		)	(998		)	(677		)
Acquisition-related charges	(52		)	(5		)	(26		)
Non-operating retirement- related (costs)/income	(1,468		)	(598		)	(1,050		)
Elimination of internal transactions	(726		)	(1,160		)	(1,675		)
Unallocated corporate amounts	(385		)	(290		)	(230		)
Total pre-tax income from continuing operations	$	11,400		$	12,330		$	15,945

Assets and Other Items by segment

($ in millions)

					Technology
			Global		Services &
	Cognitive		Business		Cloud				Global		Total
For the year ended December 31:	Solutions		Services		Platforms		Systems		Financing		Segments
2017
Assets	$	24,829	$	8,713	$	24,619	$	3,898	$	41,096	$	103,155
Depreciation/amortization of intangibles*	1,121		101		2,359		341		267		4,190
Capital expenditures/investments in intangibles	373		50		2,290		189		364		3,265
Interest income	—		—		—		—		1,527		1,527
Interest expense	—		—		—		—		381		381
2016
Assets	$	25,517	$	8,628	$	24,085	$	3,812	$	36,492	$	98,534
Depreciation/amortization of intangibles*	1,228		104		2,224		375		317		4,248
Capital expenditures/investments in intangibles	495		55		2,382		453		380		3,764
Interest income	—		—		—		—		1,547		1,547
Interest expense	—		—		—		—		371		371
2015
Assets	$	20,017	$	8,327	$	23,530	$	3,967	$	36,157	$	91,999
Depreciation/amortization of intangibles*	921		81		1,944		321		343		3,610
Capital expenditures/investments in intangibles	448		86		2,619		321		356		3,830
Interest income	—		—		—		—		1,720		1,720
Interest expense	—		—		—		—		469		469

*Segment pre-tax income from continuing operations does not include the amortization of intangible assets.

Reconciliation of assets to IBM as reported

($ in millions)

At December 31:	2017			2016			2015
Assets
Total reportable segments	$	103,155		$	98,534		$	91,999
Elimination of internal transactions	(6,272		)	(5,670		)	(4,709		)
Unallocated amounts
Cash and marketable securities	9,900			6,752			6,634
Notes and accounts receivable	2,554			2,660			2,333
Deferred tax assets	4,746			5,078			4,693
Plant, other property and equipment	2,659			2,656			2,650
Pension assets	4,643			3,034			1,734
Other	3,972			4,425			5,161
Total IBM consolidated assets	$	125,356		$	117,470		$	110,495

Geographic Information

Revenue*

($ in millions)

For the year ended December 31:	2017		2016		2015
United States	$	29,759	$	30,194	$	30,514
Japan	8,239		8,339		7,544
Other countries	41,141		41,386		43,683
Total IBM consolidated revenue	$	79,139	$	79,919	$	81,741

*Revenues are attributed to countries based on the location of the client.

Plant and Other Property—Net

($ in millions)

At December 31:	2017		2016		2015
United States	$	4,670	$	4,701	$	4,644
Other countries	5,985		5,607		5,532
Total	$	10,655	$	10,308	$	10,176

Revenue by Classes of Similar Products or Services

($ in millions)

For the year ended December 31:	2017		2016		2015
Cognitive Solutions
Software	$	13,598	$	13,969	$	14,557
Services	4,752		4,111		3,175
Systems	103		107		108
Global Business Services
Services	$	16,004	$	16,399	$	16,851
Software	179		179		164
Systems	165		121		151
Technology Services &
Cloud Platforms
Services	$	23,629	$	24,311	$	23,947
Maintenance	5,783		5,862		6,085
Software	3,610		3,818		3,907
Systems	1,254		1,346		1,203
Systems
Servers	$	3,993	$	3,567	$	5,032
Storage	2,243		2,083		2,325
Software	1,520		1,586		1,749
Services	439		478		442
Global Financing
Financing	$	1,167	$	1,231	$	1,386
Used equipment sales	530		461		454