Revenue Recognition (Tables)

9 Months Ended

Sep. 30, 2022

Revenue Recognition

Schedule of disaggregation of revenue

	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	2022		2021*		2022		2021*
Hybrid Platform & Solutions	$	4,172	$	4,074	$	12,641	$	12,082
Transaction Processing		1,640		1,332		5,107		4,257
Total Software	$	5,811	$	5,406	$	17,749	$	16,339
Business Transformation		2,165		2,068		6,646		6,070
Application Operations		1,593		1,501		4,865		4,489
Technology Consulting		943		889		2,826		2,538
Total Consulting	$	4,700	$	4,457	$	14,337	$	13,098
Hybrid Infrastructure		1,931		1,453		6,392		5,294
Infrastructure Support		1,421		1,468		4,413		4,480
Total Infrastructure	$	3,352	$	2,921	$	10,805	$	9,774
Financing**		174		184		474		601
Other		70		282		475		844
Total revenue	$	14,107	$	13,251	$	43,840	$	40,656

* Recast to reflect segment changes.

** Contains lease and loan/working capital financing arrangements which are not subject to the guidance on revenue from contracts with customers.

Schedule of hybrid cloud revenue by segment

Hybrid Cloud Revenue by Segment

	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	2022		2021*		2022		2021*
Software	$	2,186	$	2,038	$	6,604	$	5,797
Consulting		2,221		1,982		6,642		5,605
Infrastructure		768		558		2,661		2,376
Other		2		77		143		246
Total	$	5,176	$	4,655	$	16,049	$	14,024

* Recast to reflect segment changes.

Schedule of disaggregation of revenue by geography

Revenue by Geography

	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	2022		2021		2022		2021
Americas	$	7,416	$	6,579	$	22,614	$	20,178
Europe/Middle East/Africa		3,959		3,939		12,716		12,181
Asia Pacific		2,732		2,734		8,509		8,297
Total	$	14,107	$	13,251	$	43,840	$	40,656

Schedule of reconciliation of contract balances

	At September 30,		At December 31,
(Dollars in millions)	2022		2021
Notes and accounts receivable — trade (net of allowances of $214 in 2022 and $218 in 2021)	$	5,526	$	6,754
Contract assets*	$	522	$	471
Deferred income (current)	$	11,139	$	12,518
Deferred income (noncurrent)	$	3,018	$	3,577

* Included within prepaid expenses and other current assets in the Consolidated Balance Sheet.

Schedule of notes and accounts receivable - trade allowance for credit losses

(Dollars in millions)
January 1, 2022		Additions / (Releases)		Write-offs		Foreign currency and other		September 30, 2022
$	218	$	43	$	(28)	$	(19)	$	214

January 1, 2021		Additions / (Releases)		Write-offs		Foreign currency and other		December 31, 2021
$	260	$	(15)	$	(28)	$	1	$	218