Segments (Tables)

6 Months Ended

Jun. 30, 2021

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 June 30, 2021:
External revenue	$	6,098		$	4,341		$	6,342		$	1,717		$	242		$	18,740
Internal revenue		726			58			326			241			260			1,611
Total revenue	$	6,824		$	4,399		$	6,668		$	1,958		$	502		$	20,351
Pre-tax income from continuing operations	$	1,720		$	371		$	381		$	176		$	246		$	2,894
Revenue year-to-year change		5.1	%		11.5	%		0.7	%		(6.4)	%		(0.7)	%		3.5	%
Pre-tax income year-to-year change		0.7	%		2.5	%		52.3	%		(28.8)	%		39.3	%		5.5	%
Pre-tax income margin		25.2	%		8.4	%		5.7	%		9.0	%		48.9	%		14.2	%
For the three months ended June 30, 2020:
External revenue	$	5,748		$	3,890		$	6,316		$	1,852		$	265		$	18,072
Internal revenue		743			55			304			240			241			1,582
Total revenue	$	6,491		$	3,945		$	6,621		$	2,092		$	506		$	19,655
Pre-tax income from continuing operations	$	1,708		$	362		$	250		$	248		$	176		$	2,744
Pre-tax income margin		26.3	%		9.2	%		3.8	%		11.8	%		34.9	%		14.0	%

	Cloud &			Global			Global
	Cognitive			Business			Technology						Global			Total
(Dollars in millions)	Software			Services			Services			Systems			Financing			Segments
For the six months ended June 30, 2021:
External revenue	$	11,534		$	8,575		$	12,712		$	3,144		$	482		$	36,447
Internal revenue		1,558			113			639			430			428			3,168
Total revenue	$	13,093		$	8,688		$	13,351		$	3,574		$	910		$	39,615
Pre-tax income from continuing operations	$	3,147		$	761		$	520		$	174		$	412		$	5,015
Revenue year-to-year change		4.4	%		6.9	%		(0.2)	%		(1.0)	%		(10.5)	%		2.4	%
Pre-tax income year-to-year change		19.2	%		20.3	%		624.6	%		466.3	%		11.3	%		33.9	%
Pre-tax income margin		24.0	%		8.8	%		3.9	%		4.9	%		45.3	%		12.7	%
For the six months ended June 30, 2020:
External revenue	$	10,987		$	8,027		$	12,783		$	3,220		$	564		$	35,581
Internal revenue		1,556			101			599			388			453			3,096
Total revenue	$	12,543		$	8,128		$	13,382		$	3,608		$	1,017		$	38,677
Pre-tax income from continuing operations	$	2,641		$	633		$	72		$	31		$	370		$	3,747
Pre-tax income margin		21.1	%		7.8	%		0.5	%		0.9	%		36.4	%		9.7	%

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 June 30:	2021		2020
Revenue:
Total reportable segments	$	20,351	$	19,655
Other — divested businesses		0		13
Other revenue		5		37
Eliminations of internal transactions		(1,611)		(1,582)
Total consolidated revenue	$	18,745	$	18,123
Pre-tax income from continuing operations:
Total reportable segments	$	2,894	$	2,744
Amortization of acquired intangible assets		(462)		(472)
Acquisition-related (charges)/income		(18)		(1)
Non-operating retirement-related (costs)/income		(328)		(273)
Separation-related charges		(175)		—
Elimination of internal transactions		(139)		(121)
Other — divested businesses		(15)		(22)
Unallocated corporate amounts		(205)		(283)
Total pre-tax income from continuing operations	$	1,552	$	1,571

Reconciliations to IBM as Reported:

(Dollars in millions)
For the six months ended June 30:	2021		2020
Revenue:
Total reportable segments	$	39,615	$	38,677
Other — divested businesses		1		32
Other revenue		27		81
Eliminations of internal transactions		(3,168)		(3,096)
Total consolidated revenue	$	36,474	$	35,694
Pre-tax income from continuing operations:
Total reportable segments	$	5,015	$	3,747
Amortization of acquired intangible assets		(914)		(945)
Acquisition-related (charges)/income		(34)		(2)
Non-operating retirement-related (costs)/income		(670)		(538)
Separation-related charges		(236)		—
Eliminations of internal transactions		(212)		(176)
Other — divested businesses		(24)		3
Unallocated corporate amounts		(468)		(568)
Total pre-tax income from continuing operations	$	2,457	$	1,522