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Segments
9 Months Ended
Sep. 30, 2011
Segments 
Segments

8. Segments:  The tables on pages 25 and 26 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.

 

Effective January 1, 2011, the company transitioned its management and measurement system to reflect operating earnings in an effort to provide better transparency into the operational results of the business. As a result, certain acquisition-related charges and non-operating retirement-related costs are not reflected in the segment results. See the “Snapshot” section beginning on page 37 for additional information regarding this change. Prior year segment pre-tax income and pre-tax margin have been reclassified to conform to the new management and measurement system.

 

SEGMENT INFORMATION

 

 

 

Global Services

 

 

 

 

 

 

 

 

 

 

 

Global
Technology

 

Global
Business

 

 

 

Systems and

 

Global

 

Total

 

(Dollars in millions)

 

Services

 

Services

 

Software

 

Technology

 

Financing

 

Segments

 

For the three months ended September 30, 2011:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$

10,322

 

$

4,832

 

$

5,817

 

$

4,482

 

$

520

 

$

25,974

 

Internal revenue

 

316

 

199

 

804

 

190

 

480

 

1,989

 

Total revenue

 

$

10,638

 

$

5,031

 

$

6,621

 

$

4,672

 

$

999

 

$

27,963

 

Pre-tax income

 

$

1,695

 

$

775

 

$

2,214

 

$

318

 

$

481

 

$

5,484

 

Revenue year-to-year change

 

7.9

%

5.5

%

12.6

%

3.3

%

4.0

%

7.6

%

Pre-tax income year-to-year change

 

12.5

%

12.8

%

12.0

%

7.8

%

(4.0

)%

10.4

%

Pre-tax income margin

 

15.9

%

15.4

%

33.4

%

6.8

%

48.2

%

19.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended September 30, 2010:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$

9,496

 

$

4,572

 

$

5,151

 

$

4,325

 

$

529

 

$

24,072

 

Internal revenue

 

362

 

199

 

728

 

196

 

432

 

1,917

 

Total revenue

 

$

9,857

 

$

4,771

 

$

5,879

 

$

4,521

 

$

961

 

$

25,990

 

Pre-tax income*

 

$

1,506

 

$

687

 

$

1,978

 

$

295

 

$

502

 

$

4,968

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax income margin*

 

15.3

%

14.4

%

33.6

%

6.5

%

52.2

%

19.1

%

 

 

* Reclassified to conform with 2011 presentation.

 

Reconciliations to IBM as Reported:

 

(Dollars in millions)

 

 

 

 

 

For the three months ended September 30:

 

2011

 

2010*

 

Revenue:

 

 

 

 

 

Total reportable segments

 

$

27,963

 

$

25,990

 

Eliminations/other

 

(1,806

)

(1,718

)

Total IBM Consolidated

 

$

26,157

 

$

24,271

 

 

 

 

 

 

 

Pre-tax income:

 

 

 

 

 

Total reportable segments

 

$

5,484

 

$

4,968

 

Amortization of acquired intangible assets

 

(158

)

(127

)

Acquisition related charges

 

(21

)

(13

)

Non-operating retirement-related costs

 

29

 

104

 

Eliminations/other

 

(306

)

(256

)

Total IBM Consolidated

 

$

5,027

 

$

4,677

 

 

 

* Reclassified to conform with 2011 presentation.

 

SEGMENT INFORMATION

 

 

 

Global Services

 

 

 

 

 

 

 

 

 

 

 

Global
Technology

 

Global
Business

 

 

 

Systems and

 

Global

 

Total

 

(Dollars in millions)

 

Services

 

Services

 

Software

 

Technology

 

Financing

 

Segments

 

For the nine months ended September 30, 2011:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$

30,427

 

$

14,407

 

$

17,295

 

$

13,182

 

$

1,555

 

$

76,866

 

Internal revenue

 

943

 

604

 

2,425

 

652

 

1,524

 

6,148

 

Total revenue

 

$

31,370

 

$

15,012

 

$

19,720

 

$

13,834

 

$

3,078

 

$

83,015

 

Pre-tax income

 

$

4,353

 

$

2,166

 

$

6,260

 

$

843

 

$

1,497

 

$

15,118

 

Revenue year-to-year change

 

8.0

%

6.7

%

11.9

%

12.8

%

7.0

%

9.4

%

Pre-tax income year-to-year change

 

12.7

%

19.6

%

1.5

%

197.9

%

7.6

%

11.9

%

Pre-tax income margin

 

13.9

%

14.4

%

31.7

%

6.1

%

48.6

%

18.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the nine months ended September 30, 2010:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$

28,036

 

$

13,465

 

$

15,447

 

$

11,696

 

$

1,610

 

$

70,253

 

Internal revenue

 

1,014

 

599

 

2,176

 

572

 

1,267

 

5,627

 

Total revenue

 

$

29,050

 

$

14,064

 

$

17,623

 

$

12,267

 

$

2,877

 

$

75,880

 

Pre-tax income*

 

$

3,863

 

$

1,811

 

$

6,167

 

$

283

 

$

1,391

 

$

13,514

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax income margin*

 

13.3

%

12.9

%

35.0

%

2.3

%

48.3

%

17.8

%

 

 

* Reclassified to conform with 2011 presentation.

 

Reconciliations to IBM as Reported:

 

(Dollars in millions)

 

 

 

 

 

For the nine months ended September 30:

 

2011

 

2010*

 

Revenue:

 

 

 

 

 

Total reportable segments

 

$

83,015

 

$

75,880

 

Eliminations/other

 

(5,585

)

(5,028

)

Total IBM Consolidated

 

$

77,430

 

$

70,852

 

 

 

 

 

 

 

Pre-tax income:

 

 

 

 

 

Total reportable segments

 

$

15,118

 

$

13,514

 

Amortization of acquired intangible assets

 

(476

)

(355

)

Acquisition related charges

 

(32

)

(23

)

Non-operating retirement-related costs

 

37

 

293

 

Eliminations/other

 

(918

)

(662

)

Total IBM Consolidated

 

$

13,729

 

$

12,767

 

 

 

* Reclassified to conform with 2011 presentation.