Segments (Tables)

9 Months Ended

Sep. 30, 2020

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, 2020:
External revenue	$	5,553		$	3,965		$	6,462		$	1,257		$	273		$	17,510
Internal revenue		875			49			312			240			208			1,683
Total revenue	$	6,428		$	4,014		$	6,774		$	1,497		$	480		$	19,193
Pre-tax income/(loss) from continuing operations	$	1,834		$	570		$	399		$	(37)		$	196		$	2,962
Revenue year-to-year change		9.2	%		(5.1)	%		(3.1)	%		(10.6)	%		(25.6)	%		(1.2)	%
Pre-tax income/(loss) year-to-year change		42.2	%		0.6	%		(18.7)	%		nm			(28.9)	%		11.3	%
Pre-tax income/(loss) margin		28.5	%		14.2	%		5.9	%		(2.5)	%		40.7	%		15.4	%
For the three months ended September 30, 2019:
External revenue	$	5,201	*	$	4,160	*	$	6,700		$	1,481		$	343		$	17,886	*
Internal revenue		686			70			287			195			302			1,541
Total revenue	$	5,888	*	$	4,230	*	$	6,988		$	1,676		$	645		$	19,427	*
Pre-tax income from continuing operations	$	1,290	*	$	567	*	$	490		$	39		$	275		$	2,661	*
Pre-tax income margin		21.9	%*		13.4	%*		7.0	%		2.3	%		42.6	%		13.7	%*

nm - not meaningful

	Cloud &			Global			Global
	Cognitive			Business			Technology						Global			Total
(Dollars in millions)	Software			Services			Services			Systems			Financing			Segments
For the nine months ended September 30, 2020:
External revenue	$	16,540		$	11,992		$	19,245		$	4,477		$	837		$	53,090
Internal revenue		2,431			150			911			628			660			4,780
Total revenue	$	18,971		$	12,142		$	20,155		$	5,106		$	1,497		$	57,870
Pre-tax income/(loss) from continuing operations	$	4,475		$	1,203		$	471		$	(7)		$	566		$	6,708
Revenue year-to-year change		6.2	%		(4.6)	%		(5.3)	%		0.3	%		(24.5)	%		(1.8)	%
Pre-tax income/(loss) year-to-year change		(11.9)	%		4.2	%		(53.0)	%		(93.6)	%		(29.5)	%		(15.5)	%
Pre-tax income/(loss) margin		23.6	%		9.9	%		2.3	%		(0.1)	%		37.8	%		11.6	%
For the nine months ended September 30, 2019:
External revenue	$	15,731	*	$	12,513	*	$	20,412		$	4,562		$	1,100		$	54,317	*
Internal revenue		2,135			213			879			528			884			4,638
Total revenue	$	17,865	*	$	12,726	*	$	21,291		$	5,091		$	1,983		$	58,956	*
Pre-tax income/(loss) from continuing operations	$	5,082	*	$	1,154	*	$	1,000		$	(101)		$	803		$	7,938	*
Pre-tax income/(loss) margin		28.4	%*		9.1	%*		4.7	%		(2.0)	%		40.5	%		13.5	%*

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

Reconciliations to IBM as Reported:

(Dollars in millions)
For the three months ended September 30:	2020		2019
Revenue:
Total reportable segments	$	19,193	$	19,427	*
Other — divested businesses		4		83	*
Other revenue		46		59
Eliminations of internal transactions		(1,683)		(1,541)
Total consolidated revenue	$	17,560	$	18,028
Pre-tax income from continuing operations:
Total reportable segments	$	2,962	$	2,661	*
Amortization of acquired intangible assets		(459)		(473)
Acquisition-related (charges)/income		(1)		(255)
Non-operating retirement-related (costs)/income		(291)		(145)
Eliminations of internal transactions		(158)		(84)
Other — divested businesses		(20)		(25)	*
Unallocated corporate amounts		(206)		(157)
Total pre-tax income from continuing operations	$	1,827	$	1,522

* Recast to conform to current period presentation.

Reconciliations to IBM as Reported:

(Dollars in millions)
For the nine months ended September 30:	2020		2019
Revenue:
Total reportable segments	$	57,870	$	58,956	*
Other — divested businesses		36		863	*
Other revenue		127		190
Eliminations of internal transactions		(4,780)		(4,638)
Total consolidated revenue	$	53,253	$	55,370
Pre-tax income from continuing operations:
Total reportable segments	$	6,708	$	7,938	*
Amortization of acquired intangible assets		(1,404)		(816)
Acquisition-related (charges)/income		(3)		(396)
Non-operating retirement-related (costs)/income		(829)		(419)
Eliminations of internal transactions		(334)		(233)
Other — divested businesses		(17)		480	*
Unallocated corporate amounts		(773)		(380)
Total pre-tax income from continuing operations	$	3,348	$	6,173

* Recast to conform to current period presentation.