Segments (Tables)

12 Months Ended

Dec. 31, 2019

Segments

Revenue and Pre-tax Income by Segment

	Cloud &			Global			Global
($ in millions)	Cognitive			Business			Technology						Global			Total
For the year ended December 31:	Software			Services			Services			Systems			Financing			Segments
2019
External revenue	$	23,200		$	16,634		$	27,361		$	7,604		$	1,400		$	76,199
Internal revenue		2,827			278			1,157			726			1,232			6,220
Total revenue	$	26,027		$	16,911		$	28,518		$	8,330		$	2,632		$	82,419
Pre-tax income from continuing operations	$	7,952		$	1,666		$	1,645		$	701		$	1,055		$	13,019
Revenue year-to-year change		2.5	%		(0.1)	%		(5.0)	%		(5.9)	%		(17.8)	%		(2.3)	%
Pre-tax income year-to-year change		(10.5)	%		2.2	%		(7.6)	%		(22.4)	%		(22.5)	%		(10.6)	%
Pre-tax income margin		30.6	%		9.9	%		5.8	%		8.4	%		40.1	%		15.8	%
2018
External revenue	$	22,209	*	$	16,595	*	$	29,146	*	$	8,034		$	1,590		$	77,573	*
Internal revenue		3,190	*		326			872	*		815			1,610			6,813	*
Total revenue	$	25,399	*	$	16,921	*	$	30,018	*	$	8,848		$	3,200		$	84,386	*
Pre-tax income from continuing operations	$	8,882	*	$	1,629	*	$	1,781	*	$	904		$	1,361		$	14,557	*
Revenue year-to-year change		2.0	%*		2.9	%*		0.5	%*		(1.1)	%		1.0	%		1.3	%*
Pre-tax income year-to-year change		10.1	%*		25.0	%*		(32.0)	%*		(19.9)	%		6.5	%		1.1	%*
Pre-tax income margin		35.0	%*		9.6	%*		5.9	%*		10.2	%		42.5	%		17.3	%*
2017
External revenue	$	21,751	*	$	16,073	*	$	29,213	*	$	8,194		$	1,696		$	76,927	*
Internal revenue		3,159	*		363			657			750			1,471			6,401	*
Total revenue	$	24,910	*	$	16,436	*	$	29,870	*	$	8,945		$	3,168		$	83,329	*
Pre-tax income from continuing operations	$	8,068	*	$	1,303	*	$	2,618	*	$	1,128		$	1,278		$	14,396	*
Revenue year-to-year change		2.0	%*		(1.9)	%*		(3.6)	%*		5.7	%		(9.3)	%		(0.9)	%*
Pre-tax income year-to-year change		7.3	%*		(18.4)	%*		(13.2)	%*		21.9	%		(22.8)	%		(2.2)	%*
Pre-tax income margin		32.4	%*		7.9	%*		8.8	%*		12.6	%		40.3	%		17.3	%*

* Recast to conform to 2019 presentation.

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

($ in millions)
For the year ended December 31:	2019		2018			2017
Revenue
Total reportable segments	$	82,419	$	84,386	*	$	83,329	*
Other—divested businesses		786		1,810	*		2,041	*
Other revenue		162		207			171
Elimination of internal transactions		(6,220)		(6,813)	*		(6,401)	*
Total IBM consolidated revenue	$	77,147	$	79,591		$	79,139

* Recast to conform to 2019 presentation.

($ in millions)
For the year ended December 31:	2019		2018			2017
Pre-tax income from continuing operations
Total reportable segments	$	13,019	$	14,557	*	$	14,396	*
Amortization of acquired intangible assets		(1,298)		(809)			(945)
Acquisition-related charges		(423)		(16)			(52)
Non-operating retirement - related (costs)/income		(615)		(1,572)			(1,341)
Elimination of internal transactions		(290)		(725)	*		(742)	*
Other—divested businesses		390		292	*		468	*
Unallocated corporate amounts		(617)		(385)			(385)
Total pre-tax income from continuing operations	$	10,166	$	11,342		$	11,400

* Recast to conform to 2019 presentation.

Assets and Other Items by segment

	Cloud &			Global			Global
($ in millions)	Cognitive			Business			Technology					Global		Total
For the year ended December 31:	Software			Services			Services			Systems		Financing		Segments
2019
Assets	$	58,453		$	10,039		$	22,436		$	4,590	$	29,568	$	125,087
Depreciation/amortization of intangibles**		1,107			149			2,601			350		186		4,392
Capital expenditures/investments in intangibles		515			48			1,575			305		57		2,501
Interest income		—			—			—			—		1,490		1,490
Interest expense		—			—			—			—		512		512
2018
Assets	$	28,713	*	$	8,360	*	$	17,624	*	$	4,030	$	41,320	$	100,047	*
Depreciation/amortization of intangibles**		1,058	*		100	*		2,359	*		315		229		4,063	*
Capital expenditures/investments in intangibles		469	*		57	*		2,569	*		241		274		3,610	*
Interest income		—			—			—			—		1,647		1,647
Interest expense		—			—			—			—		515		515
2017
Assets	$	29,650	*	$	8,647	*	$	17,577	*	$	3,898	$	41,096	$	100,868	*
Depreciation/amortization of intangibles**		1,185	*		99	*		2,209	*		341		267		4,101	*
Capital expenditures/investments in intangibles		467	*		46	*		2,193	*		189		364		3,259	*
Interest income		—			—			—			—		1,527		1,527
Interest expense		—			—			—			—		381		381

*   Recast to conform to 2019 presentation.

** Segment pre-tax income from continuing operations does not include the amortization of intangible assets.

Reconciliation of assets to IBM as reported

($ in millions)
At December 31:	2019		2018			2017
Assets
Total reportable segments	$	125,087	$	100,047	*	$	100,868	*
Elimination of internal transactions		(4,317)		(7,143)			(6,272)
Other—divested businesses		1,894		2,575	*		2,285	*
Unallocated amounts
Cash and marketable securities		7,308		10,393			10,162
Notes and accounts receivable		3,298		1,597			2,554
Deferred tax assets		4,995		5,089			4,746
Plant, other property and equipment		2,334		2,463			2,659
Operating right-of-use assets**		3,530		—			—
Pension assets		6,865		4,666			4,643
Other		1,194		3,695			3,712
Total IBM consolidated assets	$	152,186	$	123,382		$	125,356

*   Recast to conform to 2019 presentation.

** Reflects the adoption of the FASB guidance on leases in 2019.

Geographic Information

The following provides information for those countries that are 10 percent or more of the specific category.

Revenue*

($ in millions)
For the year ended December 31:	2019		2018		2017
United States	$	28,395	$	29,078	$	29,759
Japan		8,681		8,489		8,239
Other countries		40,071		42,024		41,141
Total IBM consolidated revenue	$	77,147	$	79,591	$	79,139

* Revenues are attributed to countries based on the location of the client.

Plant and Other Property–Net

($ in millions)
At December 31:	2019		2018		2017
United States	$	4,485	$	4,585	$	4,670
Other countries		5,294		5,774		5,985
Total	$	9,778	$	10,359	$	10,655

Operating Right-of-Use Assets–Net*

($ in millions)
At December 31:	2019		2018		2017
United States	$	1,386	$	—	$	—
Japan		659		—		—
Other countries		2,951		—		—
Total	$	4,996	$	—	$	—

* Reflects the adoption of the FASB guidance on leases in 2019.

Revenue by Classes of Similar Products or Services

($ in millions)
For the year ended December 31:	2019		2018			2017
Cloud & Cognitive Software*
Software	$	18,712	$	17,970	**	$	17,681	**
Services		4,321		4,082	**		3,920	**
Systems		166		156			150
Global Business Services*
Services	$	16,363	$	16,238	**	$	15,728	**
Software		156		151	**		179	**
Systems		115		206			165
Global Technology Services*
Services	$	20,768	$	22,222	**	$	21,913	**
Maintenance		5,183		5,484			5,783
Systems		1,072		1,069			1,207
Software		338		371	**		310	**
Systems
Servers	$	3,746	$	3,996		$	3,993
Storage		1,920		2,114			2,243
Software		1,528		1,499	**		1,520	**
Services		410		425	**		438	**
Global Financing
Financing	$	1,120	$	1,223		$	1,167
Used equipment sales		281		366			530

*   Recast to conform to 2019 presentation.

** Reclassified to conform to 2019 presentation. Refer to “Basis of Presentation” in note A, “Significant Accounting Policies,” for additional information.