Segments (Tables)

9 Months Ended

Sep. 30, 2019

Segments

Revenue and Pre-tax Income by Segment

	Cloud &			Global			Global
	Cognitive			Business			Technology						Global			Total
(Dollars in millions)	Software			Services			Services			Systems			Financing			Segments
For the three months ended September 30, 2019:
External revenue	$	5,280		$	4,117		$	6,700		$	1,481		$	343		$	17,921
Internal revenue		686			70			287			195			302			1,541
Total revenue	$	5,966		$	4,187		$	6,988		$	1,676		$	645		$	19,462
Pre-tax income/(loss) from continuing operations	$	1,283		$	573		$	490		$	39		$	275		$	2,661
Revenue year-to-year change		4.0	%		0.8	%		(5.3)	%		(12.6)	%		(11.2)	%		(2.3)	%
Pre-tax income year-to-year change		(37.4)	%		1.2	%		(19.2)	%		(81.3)	%		(10.8)	%		(28.9)	%
Pre-tax income/(loss) margin		21.5	%		13.7	%		7.0	%		2.3	%		42.6	%		13.7	%
For the three months ended September 30, 2018:
External revenue	$	4,962	*	$	4,076	*	$	7,101	*	$	1,736		$	388		$	18,262	*
Internal revenue		777	*		77			279	*		181			338			1,652	*
Total revenue	$	5,738	*	$	4,153	*	$	7,380	*	$	1,917		$	726		$	19,914	*
Pre-tax income/(loss) from continuing operations	$	2,050	*	$	566	*	$	607	*	$	209		$	308		$	3,741	*
Pre-tax income/(loss) margin		35.7	%*		13.6	%*		8.2	%*		10.9	%		42.5	%		18.8	%*

* Recast to conform to 2019 presentation.

	Cloud &			Global			Global
	Cognitive			Business			Technology						Global			Total
(Dollars in millions)	Software			Services			Services			Systems			Financing			Segments
For the nine months ended September 30, 2019:
External revenue	$	15,962		$	12,391		$	20,412		$	4,562		$	1,100		$	54,426
Internal revenue		2,135			213			879			528			884			4,638
Total revenue	$	18,097		$	12,604		$	21,291		$	5,091		$	1,983		$	59,065
Pre-tax income/(loss) from continuing operations	$	5,052		$	1,188		$	1,000		$	(101)		$	803		$	7,941
Revenue year-to-year change		0.2	%		0.2	%		(5.1)	%		(15.0)	%		(18.3)	%		(3.9)	%
Pre-tax income year-to-year change		(12.3)	%		11.7	%		(11.0)	%		(128.8)	%		(23.0)	%		(15.0)	%
Pre-tax income/(loss) margin		27.9	%		9.4	%		4.7	%		(2.0)	%		40.5	%		13.4	%
For the nine months ended September 30, 2018:
External revenue	$	15,548	*	$	12,326	*	$	21,846	*	$	5,412		$	1,188		$	56,319	*
Internal revenue		2,518	*		249			589	*		576			1,240			5,173	*
Total revenue	$	18,066	*	$	12,575	*	$	22,435	*	$	5,989		$	2,428		$	61,492	*
Pre-tax income/(loss) from continuing operations	$	5,760	*	$	1,063	*	$	1,124	*	$	352		$	1,042		$	9,342	*
Pre-tax income/(loss) margin		31.9	%*		8.5	%*		5.0	%*		5.9	%		42.9	%		15.2	%*

* Recast to conform to 2019 presentation.

Reconciliation of segment revenue and pre-tax income to IBM as reported

(Dollars in millions)
For the three months ended September 30:	2019		2018
Revenue:
Total reportable segments	$	19,462	$	19,914	*
Other — divested businesses		48		432	*
Other revenue		59		62
Eliminations of internal transactions		(1,541)		(1,652)	*
Total consolidated revenue	$	18,028	$	18,756
Pre-tax income from continuing operations:
Total reportable segments	$	2,661	$	3,741	*
Amortization of acquired intangible assets		(473)		(207)
Acquisition-related (charges)/income		(255)		(2)
Non-operating retirement-related (costs)/income		(145)		(389)
Eliminations of internal transactions		(84)		(118)	*
Other — divested businesses		(25)		62	*
Unallocated corporate amounts		(157)		(91)
Total pre-tax income from continuing operations	$	1,522	$	2,996

* Recast to conform to 2019 presentation.

(Dollars in millions)
For the nine months ended September 30:	2019		2018
Revenue:
Total reportable segments	$	59,065	$	61,492	*
Other — divested businesses		754		1,335	*
Other revenue		190		176
Eliminations of internal transactions		(4,638)		(5,173)	*
Total consolidated revenue	$	55,370	$	57,830
Pre-tax income from continuing operations:
Total reportable segments	$	7,941	$	9,342	*
Amortization of acquired intangible assets		(816)		(613)
Acquisition-related (charges)/income		(396)		(3)
Non-operating retirement-related (costs)/income		(419)		(1,185)
Eliminations of internal transactions		(233)		(615)	*
Other — divested businesses		477		265	*
Unallocated corporate amounts		(380)		(283)
Total pre-tax income from continuing operations	$	6,173	$	6,908

* Recast to conform to 2019 presentation.