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Segments
 6 Months Ended
Jun. 30, 2018
Segments  
Segments

 

7. Segments: The tables below reflect the continuing operations results 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

 

 

 

 

 

 

 

Technology

 

 

 

 

 

 

 

 

 

 

 

Global

 

Services &

 

 

 

 

 

 

 

 

 

Cognitive

 

Business

 

Cloud

 

 

 

Global

 

Total

 

(Dollars in millions)

 

Solutions

 

Services

 

Platforms

 

Systems

 

Financing

 

Segments

 

For the three months ended June 30, 2018:

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$
4,580

 

$
4,192

 

$
8,615

 

$
2,177

 

$
394

 

$
19,958

 

Internal revenue

 
703

 
83

 
169

 
242

 
473

 
1,670

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

$
5,283

 

$
4,275

 

$
8,784

 

$
2,419

 

$
867

 

$
21,628

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax income from continuing operations

 

$
1,756

 

$
385

 

$
883

 

$
346

 

$
357

 

$
3,728

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue year-to-year change

 
1.3

%
2.0

%
2.4

%
25.7

%
23.0

%
4.9

%

Pre-tax income year-to-year change

 
9.1

%
23.7

%
(11.2

)%
376.8

%
26.8

%
14.0

%

Pre-tax income margin

 
33.2

%
9.0

%
10.1

%
14.3

%
41.2

%
17.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 *

 

$
1,610

 

$
312

 

$
994

 

$
73

 

$
282

 

$
3,270

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax income margin *

 
30.9

%
7.4

%
11.6

%
3.8

%
40.0

%
15.9

%

 

 

* Recast to reflect adoption of the FASB guidance on presentation of net benefit cost.

 

Reconciliations to IBM as Reported:

 

(Dollars in millions)

 

 

 

 

 

For the three months ended June 30:

 

2018

 

2017

 

Revenue:

 

 

 

 

 

Total reportable segments

 

$
21,628

 

$
20,612

 

Eliminations of internal transactions

 
(1,670

)
(1,388

)

Other revenue

 
45

 
65

 

 

 

 

 

 

 

Total consolidated revenue

 

$
20,003

 

$
19,289

 

 

 

 

 

 

 

 

 

Pre-tax income from continuing operations:

 

 

 

 

 

Total reportable segments

 

$
3,728

 

$
3,270

*

Amortization of acquired intangible assets

 
(203

)
(243

)

Acquisition-related (charges)/income

 
(1

)
(6

)

Non-operating retirement-related (costs)/income

 
(394

)
(349

)*

Eliminations of internal transactions

 
(291

)
(161

)

Unallocated corporate amounts

 
(62

)
(67

)

 

 

 

 

 

 

Total pre-tax income from continuing operations

 

$
2,776

 

$
2,443

 

 

 

 

 

 

 

 

 

 

 

* Recast to reflect adoption of the FASB guidance on presentation of net benefit cost.

 

 

SEGMENT INFORMATION

 

 

 

 

 

 

 

Technology

 

 

 

 

 

 

 

 

 

 

 

Global

 

Services &

 

 

 

 

 

 

 

 

 

Cognitive

 

Business

 

Cloud

 

 

 

Global

 

Total

 

(Dollars in millions)

 

Solutions

 

Services

 

Platforms

 

Systems

 

Financing

 

Segments

 

For the six months ended June 30, 2018:

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$
8,879

 

$
8,365

 

$
17,240

 

$
3,676

 

$
799

 

$
38,961

 

Internal revenue

 
1,483

 
172

 
310

 
395

 
902

 
3,262

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

$
10,362

 

$
8,538

 

$
17,550

 

$
4,072

 

$
1,701

 

$
42,222

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax income from continuing operations

 

$
3,089

 

$
530

 

$
1,320

 

$
143

 

$
734

 

$
5,816

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue year-to-year change

 
3.7

%
3.1

%
3.5

%
16.8

%
15.5

%
5.1

%

Pre-tax income year-to-year change

 
7.3

%
(10.6

)%
(20.9

)%

nm

 
23.9

%
3.6

%

Pre-tax income margin

 
29.8

%
6.2

%
7.5

%
3.5

%
43.1

%
13.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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/(loss) from continuing operations *

 

$
2,878

 

$
593

 

$
1,668

 

$
(115

)

$
592

 

$
5,616

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax income/(loss) margin *

 
28.8

%
7.2

%
9.8

%
(3.3

)%
40.2

%
14.0

%

 

 

* Recast to reflect adoption of the FASB guidance on presentation of net benefit cost.

nm - not meaningful

 

Reconciliations to IBM as Reported:

 

(Dollars in millions)

 

 

 

 

 

For the six months ended June 30:

 

2018

 

2017

 

Revenue:

 

 

 

 

 

Total reportable segments

 

$
42,222

 

$
40,188

 

Eliminations of internal transactions

 
(3,262

)
(2,881

)

Other revenue

 
114

 
136

 

 

 

 

 

 

 

Total consolidated revenue

 

$
39,075

 

$
37,443

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax income from continuing operations:

 

 

 

 

 

Total reportable segments

 

$
5,816

 

$
5,616

*

Amortization of acquired intangible assets

 
(406

)
(493

)

Acquisition-related (charges)/income

 
(1

)
(19

)

Non-operating retirement-related (costs)/income

 
(796

)
(696

)*

Eliminations of internal transactions

 
(509

)
(388

)

Unallocated corporate amounts

 
(192

)
(154

)

 

 

 

 

 

 

Total pre-tax income from continuing operations

 

$
3,911

 

$
3,867

 

 

 

 

 

 

 

 

 

 

 

* Recast to reflect adoption of the FASB guidance on presentation of net benefit cost.