Segments (Tables)

9 Months Ended

Sep. 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 September 30, 2021:
External revenue	$	5,692		$	4,427		$	6,154		$	1,107		$	220		$	17,601
Internal revenue		764			53			317			176			153			1,463
Total revenue	$	6,456		$	4,480		$	6,471		$	1,283		$	373		$	19,064
Pre-tax income/(loss) from continuing operations	$	1,675		$	587		$	383		$	(207)		$	206		$	2,644
Revenue year-to-year change		0.4	%		11.6	%		(4.5)	%		(14.3)	%		(22.3)	%		(0.7)	%
Pre-tax income year-to-year change		(8.7)	%		3.0	%		(4.1)	%		nm			5.1	%		(10.7)	%
Pre-tax income/(loss) margin		25.9	%		13.1	%		5.9	%		(16.1)	%		55.1	%		13.9	%
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
Pre-tax income/(loss) margin		28.5	%		14.2	%		5.9	%		(2.5)	%		40.7	%		15.4	%

	Cloud &			Global			Global
	Cognitive			Business			Technology						Global			Total
(Dollars in millions)	Software			Services			Services			Systems			Financing			Segments
For the nine months ended September 30, 2021:
External revenue	$	17,227		$	13,002		$	18,866		$	4,251		$	702		$	54,047
Internal revenue		2,322			166			956			606			581			4,631
Total revenue	$	19,549		$	13,168		$	19,822		$	4,857		$	1,283		$	58,678
Pre-tax income/(loss) from continuing operations	$	4,822		$	1,349		$	903		$	(33)		$	618		$	7,659
Revenue year-to-year change		3.0	%		8.5	%		(1.7)	%		(4.9)	%		(14.3)	%		1.4	%
Pre-tax income year-to-year change		7.8	%		12.1	%		91.9	%		nm			9.1	%		14.2	%
Pre-tax income/(loss) margin		24.7	%		10.2	%		4.6	%		(0.7)	%		48.1	%		13.1	%
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
Pre-tax income/(loss) margin		23.6	%		9.9	%		2.3	%		(0.1)	%		37.8	%		11.6	%

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:	2021		2020
Revenue:
Total reportable segments	$	19,064	$	19,193
Other — divested businesses		(3)		4
Other revenue		20		46
Eliminations of internal transactions		(1,463)		(1,683)
Total consolidated revenue	$	17,618	$	17,560
Pre-tax income from continuing operations:
Total reportable segments	$	2,644	$	2,962
Amortization of acquired intangible assets		(475)		(459)
Acquisition-related (charges)/income		(4)		(1)
Non-operating retirement-related (costs)/income		(328)		(291)
Separation-related charges		(277)		—
Elimination of internal transactions		(57)		(158)
Other — divested businesses		(10)		(20)
Unallocated corporate amounts		(175)		(206)
Total pre-tax income from continuing operations	$	1,319	$	1,827

Reconciliations to IBM as Reported:

(Dollars in millions)
For the nine months ended September 30:	2021		2020
Revenue:
Total reportable segments	$	58,678	$	57,870
Other — divested businesses		(2)		36
Other revenue		47		127
Eliminations of internal transactions		(4,631)		(4,780)
Total consolidated revenue	$	54,093	$	53,253
Pre-tax income from continuing operations:
Total reportable segments	$	7,659	$	6,708
Amortization of acquired intangible assets		(1,389)		(1,404)
Acquisition-related (charges)/income		(37)		(3)
Non-operating retirement-related (costs)/income		(998)		(829)
Separation-related charges		(513)		—
Eliminations of internal transactions		(269)		(334)
Other — divested businesses		(34)		(17)
Unallocated corporate amounts		(643)		(773)
Total pre-tax income from continuing operations	$	3,776	$	3,348