Segments (Tables)

9 Months Ended

Sep. 30, 2022

Segments

Revenue and Pre-tax Income by Segment

													Total
(Dollars in millions)	Software			Consulting			Infrastructure			Financing			Segments
For the three months ended September 30, 2022:
Revenue	$	5,811		$	4,700		$	3,352		$	174		$	14,037
Pre-tax income from continuing operations	$	1,306		$	462		$	280		$	79		$	2,128
Revenue year-to-year change		7.5	%		5.4	%		14.8	%		(5.7)	%		8.2	%
Pre-tax income year-to-year change		31.9	%		(0.8)	%		34.1	%		(40.4)	%		18.4	%
Pre-tax income margin		22.5	%		9.8	%		8.3	%		45.4	%		15.2	%
For the three months ended September 30, 2021*:
Revenue	$	5,406		$	4,457		$	2,921		$	184		$	12,969
Pre-tax income from continuing operations	$	990		$	466		$	209		$	132		$	1,797
Pre-tax income margin		18.3	%		10.5	%		7.1	%		71.7	%		13.9	%

													Total
(Dollars in millions)	Software			Consulting			Infrastructure			Financing			Segments
For the nine months ended September 30, 2022:
Revenue	$	17,749		$	14,337		$	10,805		$	474		$	43,365
Pre-tax income from continuing operations	$	3,816		$	1,154		$	1,236		$	265		$	6,470
Revenue year-to-year change		8.6	%		9.5	%		10.6	%		(21.2)	%		8.9	%
Pre-tax income year-to-year change		41.0	%		13.9	%		25.0	%		(26.8)	%		27.6	%
Pre-tax income margin		21.5	%		8.0	%		11.4	%		55.9	%		14.9	%
For the nine months ended September 30, 2021*:
Revenue	$	16,339		$	13,098		$	9,774		$	601		$	39,812
Pre-tax income from continuing operations	$	2,707		$	1,013		$	989		$	362		$	5,071
Pre-tax income margin		16.6	%		7.7	%		10.1	%		60.1	%		12.7	%

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 September 30:	2022			2021*
Revenue:
Total reportable segments	$	14,037		$	12,969
Other‒divested businesses		3			189
Other revenue		68			93
Total consolidated revenue	$	14,107		$	13,251
Pre-tax income/(loss) from continuing operations:
Total reportable segments	$	2,128		$	1,797
Amortization of acquired intangible assets		(417)			(469)
Acquisition-related (charges)/income		(1)			(4)
Non-operating retirement-related (costs)/income		(6,062)	**		(318)
Kyndryl-related impacts+		14			—
Eliminations of internal transactions		0			1
Other‒divested businesses		0			(41)
Unallocated corporate amounts and other		(163)			(155)
Total pre-tax income/(loss) from continuing operations	$	(4,501)		$	813

* Recast to conform to current year presentation.

** Includes a one-time, non-cash, pre-tax pension settlement charge of $5.9 billion. See note 18, “Retirement-Related Benefits,” for additional information.

+ Refer to note 8, “Financial Assets & Liabilities,” for additional information.

Reconciliations to IBM as Reported:

(Dollars in millions)
For the nine months ended September 30:	2022			2021*
Revenue:
Total reportable segments	$	43,365		$	39,812
Other‒divested businesses		319			583
Other revenue		156			261
Total consolidated revenue	$	43,840		$	40,656
Pre-tax income/(loss) from continuing operations:
Total reportable segments	$	6,470		$	5,071
Amortization of acquired intangible assets		(1,337)			(1,371)
Acquisition-related charges		(9)			(37)
Non-operating retirement-related (costs)/income		(6,455)	**		(967)
Kyndryl-related impacts+		(353)			—
Eliminations of internal transactions		(15)			(3)
Other‒divested businesses		108	++		(106)
Unallocated corporate amounts		(565)			(619)
Total pre-tax income/(loss) from continuing operations	$	(2,156)		$	1,968

* Recast to conform to current year presentation.

** Includes a one-time, non-cash, pre-tax pension settlement charge of $5.9 billion. See note 18, “Retirement-Related Benefits,” for additional information.

+ Refer to note 8, “Financial Assets & Liabilities,” for additional information.

++ Includes a gain from the sale of the company’s healthcare software assets. Refer to note 6, “Acquisitions & Divestitures.”