Segments (Tables)

6 Months Ended

Jun. 30, 2016

Segments:

Revenue and Pre-tax Income by Segment

SEGMENT INFORMATION

	Cognitive Solutions&
	Industry Services						Technology
				Global			Services &
	Cognitive			Business			Cloud						Global			Total
(Dollars in millions)	Solutions			Services			Platforms			Systems			Financing			Segments
For the three months ended June 30, 2016:
External revenue	$	4,675		$	4,255		$	8,857		$	1,950		$	424		$	20,162
Internal revenue	594			103			156			206			502			1,561
Total revenue	$	5,269		$	4,359		$	9,013		$	2,156		$	926		$	21,723
Pre-tax income/(loss) from continuing operations	$	1,451		$	476		$	1,279		$	229		$	467		$	3,901
Revenue year-to-year change	4.4		%	(2.6		)%	(0.6		)%	(21.0		)%	(21.7		)%	(3.5		)%
Pre-tax income year-to-year change	(20.5		)%	(26.1		)%	(9.5		)%	(57.5		)%	(23.8		)%	(22.5		)%
Pre-tax income margin	27.5		%	10.9		%	14.2		%	10.6		%	50.5		%	18.0		%
For the three months ended June 30, 2015*:
External revenue	$	4,516		$	4,345		$	8,898		$	2,541		$	478		$	20,778
Internal revenue	532			130			173			189			704			1,728
Total revenue	$	5,049		$	4,475		$	9,071		$	2,730		$	1,182		$	22,506
Pre-tax income from continuing operations	$	1,825		$	643		$	1,414		$	538		$	613		$	5,033
Pre-tax income margin	36.1		%	14.4		%	15.6		%	19.7		%	51.9		%	22.4		%

*Recast to conform with 2016 presentation.

SEGMENT INFORMATION

	Cognitive Solutions &
	Industry Services						Technology
				Global			Services &
	Cognitive			Business			Cloud						Global			Total
(Dollars in millions)	Solutions			Services			Platforms			Systems			Financing			Segments
For the six months ended June 30, 2016:
External revenue	$	8,654		$	8,387		$	17,280		$	3,626		$	834		$	38,781
Internal revenue	1,262			216			321			418			988			3,206
Total revenue	$	9,916		$	8,603		$	17,602		$	4,044		$	1,822		$	41,987
Pre-tax income/(loss) from continuing operations	$	2,465		$	665		$	1,537		$	218		$	853		$	5,739
Revenue year-to-year change	1.9		%	(3.6		)%	(1.1		)%	(19.8		)%	(18.3		)%	(4.0		)%
Pre-tax income year-to-year change	(26.5		)%	(46.0		)%	(39.6		)%	(72.7		)%	(24.4		)%	(36.6		)%
Pre-tax income margin	24.9		%	7.7		%	8.7		%	5.4		%	46.8		%	13.7		%
For the six months ended June 30, 2015*:
External revenue	$	8,564		$	8,663		$	17,452		$	4,683		$	939		$	40,301
Internal revenue	1,167			261			339			362			1,290			3,419
Total revenue	$	9,731		$	8,923		$	17,791		$	5,044		$	2,229		$	43,719
Pre-tax income from continuing operations	$	3,353		$	1,231		$	2,544		$	800		$	1,128		$	9,056
Pre-tax income margin	34.5		%	13.8		%	14.3		%	15.9		%	50.6		%	20.7		%

* Recast to conform with 2016 presentation.

Reconciliation of segment revenue to IBM as reported

(Dollars in millions)
For the three months ended June 30:	2016			2015*
Revenue:
Total reportable segments	$	21,723		$	22,506
Eliminations of internal transactions	(1,561		)	(1,728		)
Other revenue	76			35
Total consolidated revenue	$	20,238		$	20,813

(Dollars in millions)
For the six months ended June 30:	2016			2015*
Revenue:
Total reportable segments	$	41,987		$	43,719
Eliminations of internal transactions	(3,206		)	(3,419		)
Other revenue	142			102
Total consolidated revenue	$	38,923		$	40,403

* Recast to conform with 2016 presentation.

Reconciliation of segment pre-tax income to IBM as reported

(Dollars in millions)
For the three months ended June 30:	2016			2015*
Pre-tax income from continuing operations:
Total reportable segments	$	3,901		$	5,033
Amortization of acquired intangible assets	(265		)	(160		)
Acquisition-related (charges)/income	(23		)	(7		)
Non-operating retirement-related (costs)/income	(163		)	(186		)
Eliminations of internal transactions	(334		)	(473		)
Unallocated corporate amounts	(67		)	18
Total pre-tax income from continuing operations	$	3,049		$	4,224

(Dollars in millions)
For the six months ended June 30:	2016			2015*
Pre-tax income from continuing operations:
Total reportable segments	$	5,739		$	9,056
Amortization of acquired intangible assets	(477		)	(330		)
Acquisition-related charges	3			(8		)
Non-operating retirement-related (costs)/income	(306		)	(627		)
Eliminations of internal transactions	(689		)	(813		)
Unallocated corporate amounts	(189		)	(53		)
Total pre-tax income from continuing operations	$	4,082		$	7,225

*Recast to conform with 2016 presentation.