Segments

3 Months Ended

Mar. 31, 2021

Segments

Segments

4. Segments:

The following tables reflect the results of continuing operations of the company’s segments consistent with the management and measurement system utilized within the company. Performance measurement is based on pre-tax income from continuing operations. These results are used, in part, by the chief operating decision maker, both in evaluating the performance of, and in allocating resources to, each of the segments.

SEGMENT INFORMATION

	Cloud &			Global			Global
	Cognitive			Business			Technology						Global			Total
(Dollars in millions)	Software			Services			Services			Systems			Financing			Segments
For the three months ended March 31, 2021:
External revenue	$	5,437		$	4,234		$	6,370		$	1,427		$	240		$	17,707
Internal revenue		832			55			313			189			168			1,557
Total revenue	$	6,269		$	4,289		$	6,683		$	1,616		$	408		$	19,264
Pre-tax income/(loss) from continuing operations	$	1,428		$	390		$	140		$	(2)		$	166		$	2,122
Revenue year-to-year change		3.6	%		2.5	%		(1.2)	%		6.6	%		(20.2)	%		1.3	%
Pre-tax income/(loss) year-to-year change		53.0	%		44.1	%		nm			nm			(14.2)	%		111.6	%
Pre-tax income/(loss) margin		22.8	%		9.1	%		2.1	%		(0.1)	%		40.8	%		11.0	%
For the three months ended March 31, 2020:
External revenue	$	5,238		$	4,136		$	6,467		$	1,368		$	299		$	17,508
Internal revenue		813			46			294			148			212			1,514
Total revenue	$	6,052		$	4,183		$	6,761		$	1,516		$	511		$	19,023
Pre-tax income/(loss) from continuing operations	$	933		$	271		$	(178)		$	(217)		$	194		$	1,003
Pre-tax income/(loss) margin		15.4	%		6.5	%		(2.6)	%		(14.3)	%		37.9	%		5.3	%

nm - not meaningful

Reconciliations to IBM as Reported:

(Dollars in millions)
For the three months ended March 31:	2021		2020
Revenue:
Total reportable segments	$	19,264	$	19,023
Other–divested businesses		1		18
Other revenue		21		44
Eliminations of internal transactions		(1,557)		(1,514)
Total consolidated revenue	$	17,730	$	17,571
Pre-tax income from continuing operations:
Total reportable segments	$	2,122	$	1,003
Amortization of acquired intangible assets		(452)		(473)
Acquisition-related (charges)/income		(16)		0
Non-operating retirement-related (costs)/income		(343)		(264)
Spin-off related charges		(61)		—
Elimination of internal transactions		(73)		(55)
Other–divested businesses		(8)		25
Unallocated corporate amounts		(263)		(284)
Total pre-tax income/(loss) from continuing operations	$	905	$	(49)