Segments (Tables)

9 Months Ended

Sep. 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 September 30, 2017:
External revenue	$	4,400		$	4,093		$	8,457		$	1,721		$	427		$	19,098
Internal revenue	629			92			164			227			272			1,384
Total revenue	$	5,030		$	4,185		$	8,621		$	1,948		$	698		$	20,482
Pre-tax income from continuing operations	$	1,649		$	453		$	1,192		$	339		$	244		$	3,876
Revenue year-to-year change	2.6		%	(2.3		)%	(3.4		)%	12.3		%	(8.5		)%	(0.6		)%
Pre-tax income year-to-year change	4.8		%	(16.8		)%	(7.5		)%	149.7		%	(31.4		)%	(0.5		)%
Pre-tax income margin	32.8		%	10.8		%	13.8		%	17.4		%	34.9		%	18.9		%
For the three months ended September 30, 2016:
External revenue	$	4,235		$	4,191		$	8,748		$	1,558		$	412		$	19,145
Internal revenue	667			93			180			176			352			1,468
Total revenue	$	4,902		$	4,284		$	8,929		$	1,734		$	763		$	20,613
Pre-tax income from continuing operations	$	1,574		$	544		$	1,288		$	136		$	355		$	3,897
Pre-tax income margin	32.1		%	12.7		%	14.4		%	7.8		%	46.5		%	18.9		%

	Cognitive Solutions & Industry Services
							Technology
				Global			Services &
	Cognitive			Business			Cloud						Global			Total
(Dollars in millions)	Solutions			Services			Platforms			Systems			Financing			Segments
For the nine months ended September 30, 2017:
External revenue	$	13,021		$	12,196		$	25,079		$	4,863		$	1,246		$	56,405
Internal revenue	2,001			271			497			571			925			4,265
Total revenue	$	15,022		$	12,467		$	25,576		$	5,434		$	2,171		$	60,670
Pre-tax income from continuing operations	$	4,539		$	1,065		$	2,888		$	227		$	836		$	9,555
Revenue year-to-year change	1.4		%	(3.3		)%	(3.6		)%	(6.0		)%	(16.0		)%	(3.1		)%
Pre-tax income year-to-year change	12.4		%	(12.0		)%	2.2		%	(35.9		)%	(30.7		)%	(0.8		)%
Pre-tax income margin	30.2		%	8.5		%	11.3		%	4.2		%	38.5		%	15.7		%
For the nine months ended September 30, 2016:
External revenue	$	12,889		$	12,578		$	26,029		$	5,184		$	1,245		$	57,926
Internal revenue	1,929			310			501			594			1,340			4,673
Total revenue	$	14,818		$	12,888		$	26,530		$	5,778		$	2,585		$	62,599
Pre-tax income from continuing operations	$	4,039		$	1,210		$	2,825		$	354		$	1,208		$	9,636
Pre-tax income margin	27.3		%	9.4		%	10.6		%	6.1		%	46.7		%	15.4		%

Reconciliation of segment revenue to IBM as reported

(Dollars in millions)
For the three months ended September 30:	2017			2016
Revenue:
Total reportable segments	$	20,482		$	20,613
Eliminations of internal transactions	(1,384		)	(1,468		)
Other revenue	56			81
Total consolidated revenue	$	19,153		$	19,226

(Dollars in millions)
For the nine months ended September 30:	2017			2016
Revenue:
Total reportable segments	$	60,670		$	62,599
Eliminations of internal transactions	(4,265		)	(4,673		)
Other revenue	192			223
Total consolidated revenue	$	56,597		$	58,149

Reconciliation of segment pre-tax income to IBM as reported

(Dollars in millions)
For the three months ended September 30:	2017			2016
Pre-tax income from continuing operations:
Total reportable segments	$	3,876		$	3,897
Amortization of acquired intangible assets	(238		)	(265		)
Acquisition-related (charges)/income	0			(4		)
Non-operating retirement-related (costs)/income	(306		)	(139		)
Eliminations of internal transactions	(126		)	(185		)
Unallocated corporate amounts	(141		)	(42		)
Total pre-tax income from continuing operations	$	3,065		$	3,263

(Dollars in millions)
For the nine months ended September 30:	2017			2016
Pre-tax income from continuing operations:
Total reportable segments	$	9,555		$	9,636
Amortization of acquired intangible assets	(731		)	(742		)
Acquisition-related (charges)/income	(19		)	(1		)
Non-operating retirement-related (costs)/income	(1,065		)	(444		)
Eliminations of internal transactions	(515		)	(873		)
Unallocated corporate amounts	(294		)	(230		)
Total pre-tax income from continuing operations	$	6,931		$	7,345