Segments (Tables)

6 Months Ended

Jun. 30, 2017

Segments:

Revenue and Pre-tax Income by Segment

	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, 2017:
External revenue	$	4,559		$	4,097		$	8,406		$	1,747		$	415		$	19,224
Internal revenue	655			93			173			177			290			1,388
Total revenue	$	5,214		$	4,190		$	8,579		$	1,924		$	705		$	20,612
Pre-tax income from continuing operations	$	1,615		$	321		$	1,009		$	74		$	282		$	3,302
Revenue year-to-year change	(1.0		)%	(3.9		)%	(4.8		)%	(10.8		)%	(23.9		)%	(5.1		)%
Pre-tax income year-to-year change	11.3		%	(32.5		)%	(21.1		)%	(67.5		)%	(39.6		)%	(15.4		)%
Pre-tax income margin	31.0		%	7.7		%	11.8		%	3.9		%	40.0		%	16.0		%
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 from continuing operations	$	1,451		$	476		$	1,279		$	229		$	467		$	3,901
Pre-tax income margin	27.5		%	10.9		%	14.2		%	10.6		%	50.5		%	18.0		%

	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, 2017:
External revenue	$	8,621		$	8,103		$	16,622		$	3,142		$	819		$	37,307
Internal revenue	1,371			179			333			344			653			2,881
Total revenue	$	9,992		$	8,282		$	16,955		$	3,486		$	1,473		$	40,188
Pre-tax income from continuing operations	$	2,889		$	612		$	1,696		$	(112	)	$	593		$	5,679
Revenue year-to-year change	0.8		%	(3.7		)%	(3.7		)%	(13.8		)%	(19.1		)%	(4.3		)%
Pre-tax income year-to-year change	17.2		%	(8.0		)%	10.3		%	nm		%	(30.5		)%	(1.0		)%
Pre-tax income margin	28.9		%	7.4		%	10.0		%	(3.2		)%	40.3		%	14.1		%
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 from continuing operations	$	2,465		$	665		$	1,537		$	218		$	853		$	5,739
Pre-tax income margin	24.9		%	7.7		%	8.7		%	5.4		%	46.8		%	13.7		%

nm - not meaningful

Reconciliation of segment revenue to IBM as reported

(Dollars in millions)
For the three months ended June 30:	2017			2016
Revenue:
Total reportable segments	$	20,612		$	21,723
Eliminations of internal transactions	(1,388		)	(1,561		)
Other revenue	65			76
Total consolidated revenue	$	19,289		$	20,238
(Dollars in millions)
For the six months ended June 30:	2017			2016
Revenue:
Total reportable segments	$	40,188		$	41,987
Eliminations of internal transactions	(2,881		)	(3,206		)
Other revenue	136			142
Total consolidated revenue	$	37,443		$	38,923

Reconciliation of segment pre-tax income to IBM as reported

(Dollars in millions)
For the three months ended June 30:	2017			2016
Pre-tax income from continuing operations:
Total reportable segments	$	3,302		$	3,901
Amortization of acquired intangible assets	(243		)	(265		)
Acquisition-related (charges)/income	(6		)	(23		)
Non-operating retirement-related (costs)/income	(381		)	(163		)
Eliminations of internal transactions	(161		)	(334		)
Unallocated corporate amounts	(67		)	(67		)
Total pre-tax income from continuing operations	$	2,443		$	3,049

(Dollars in millions)
For the six months ended June 30:	2017			2016
Pre-tax income from continuing operations:
Total reportable segments	$	5,679		$	5,739
Amortization of acquired intangible assets	(493		)	(477		)
Acquisition-related (charges)/income	(19		)	3
Non-operating retirement-related (costs)/income	(759		)	(306		)
Eliminations of internal transactions	(388		)	(689		)
Unallocated corporate amounts	(154		)	(189		)
Total pre-tax income from continuing operations	$	3,867		$	4,082