Segments

3 Months Ended

Mar. 31, 2017

Segments:

Segments:

6. Segments: The table on page 27 reflects the results of continuing operations of the company’s segments consistent with the management and measurement system utilized within the company. Performance measurement is based on operating pre-tax income from continuing operations. The segments represent components of the company for which separate financial information is available that is utilized on a regular basis by the chief operating decision maker (the chief executive officer) in determining how to allocate resources and evaluate performance.

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 March 31, 2017:
External revenue	$	4,062		$	4,006		$	8,216		$	1,395		$	405		$	18,083
Internal revenue	716			86			160			167			363			1,492
Total revenue	$	4,778		$	4,092		$	8,376		$	1,562		$	768		$	19,576
Pre-tax income from continuing operations	$	1,274		$	291		$	687		$	(186	)	$	311		$	2,377
Revenue year-to-year change	2.8		%	(3.6		)%	(2.5		)%	(17.3		)%	(14.3		)%	(3.4		)%
Pre-tax income year-to-year change	25.7		%	53.4		%	166.1		%	nm			(19.5		)%	29.4		%
Pre-tax income margin	26.7		%	7.1		%	8.2		%	(11.9		)%	40.5		%	12.1		%
For the three months ended March 31, 2016:
External revenue	$	3,979		$	4,131		$	8,424		$	1,675		$	410		$	18,619
Internal revenue	668			113			165			212			486			1,645
Total revenue	$	4,647		$	4,245		$	8,589		$	1,888		$	896		$	20,264
Pre-tax income from continuing operations	$	1,013		$	190		$	258		$	(10	)	$	386		$	1,837
Pre-tax income margin	21.8		%	4.5		%	3.0		%	(0.5		)%	43.1		%	9.1		%

nm - not meaningful

Reconciliations to IBM as Reported:

(Dollars in millions)
For the three months ended March 31:	2017			2016
Revenue:
Total reportable segments	$	19,576		$	20,264
Eliminations of internal transactions	(1,492		)	(1,645		)
Other revenue	71			66
Total consolidated revenue	$	18,155		$	18,684
Pre-tax income from continuing operations:
Total reportable segments	$	2,377		$	1,837
Amortization of acquired intangible assets	(249		)	(211		)
Acquisition-related (charges)/income	(13		)	27
Non-operating retirement-related (costs)/income	(378		)	(142		)
Eliminations of internal transactions	(227		)	(355		)
Unallocated corporate amounts	(87		)	(122		)
Total pre-tax income from continuing operations	$	1,424		$	1,034