| Segments |
4. Segments: During the first quarter of 2020, the company realigned offerings and the related management system to reflect divestitures completed in the second half of 2019 and tighter integration of certain industry-related consulting services. Accordingly, the company updated its Cloud & Cognitive Software segment, Global Business Services segment and the Other – divested businesses category in the first quarter of 2020 and recast the related historical information for consistency with the go-forward performance. Total recast revenue for full-year 2019 was approximately $0.3 billion of IBM’s total $77 billion. There was no change to the Global Technology Services, Systems or Global Financing segments, and there was no impact to IBM’s consolidated results. The following table displays the segment updates: | | | Management System Change | | Resulting Segment Implications | Divestitures of IBM's Risk Analytics and Regulatory Offerings and Sales Performance Management Offerings | | - Cloud & Cognitive Software (Cognitive Applications) | | | + Other—divested businesses | | | | Realignment of certain industry-related consulting offerings to the Global Business Services segment | | - Cloud & Cognitive Software (Cognitive Applications) | | | + Global Business Services (Consulting) |
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, 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 | | Revenue year-to-year change | | | 4.2 | % | | (1.1) | % | | (5.6) | % | | 1.7 | % | | (27.6) | % | | (1.9) | % | Pre-tax income year-to-year change | | | (47.7) | % | | (9.1) | % | | (164.7) | % | | 7.6 | % | | (32.7) | % | | (59.0) | % | Pre-tax income/(loss) margin | | | 15.4 | % | | 6.5 | % | | (2.6) | % | | (14.3) | % | | 37.9 | % | | 5.3 | % | | | | | | | | | | | | | | | | | | | | | For the three months ended March 31, 2019: | | | | | | | | | | | | | | | | | | | | External revenue | | $ | 4,967 | * | $ | 4,155 | * | $ | 6,875 | | $ | 1,328 | | $ | 406 | | $ | 17,731 | * | Internal revenue | | | 841 | | | 74 | | | 290 | | | 163 | | | 300 | | | 1,668 | | Total revenue | | $ | 5,808 | * | $ | 4,229 | * | $ | 7,164 | | $ | 1,491 | | $ | 706 | | $ | 19,398 | * | Pre-tax income/(loss) from continuing operations | | $ | 1,785 | * | $ | 298 | * | $ | 275 | | $ | (202) | | $ | 288 | | $ | 2,445 | * | Pre-tax income/(loss) margin | | | 30.7 | %* | | 7.0 | %* | | 3.8 | % | | (13.5) | % | | 40.8 | % | | 12.6 | %* |
Reconciliations to IBM as Reported: | | | | | | | | (Dollars in millions) | | | | | | | | For the three months ended March 31: | | 2020 | | 2019 | | Revenue: | | | | | | | | Total reportable segments | | $ | 19,023 | | $ | 19,398 | * | Other—divested businesses | | | 18 | | | 377 | * | Other revenue | | | 44 | | | 74 | | Eliminations of internal transactions | | | (1,514) | | | (1,668) | | Total consolidated revenue | | $ | 17,571 | | $ | 18,182 | | | | | | | | | | Pre-tax income from continuing operations: | | | | | | | | Total reportable segments | | $ | 1,003 | | $ | 2,445 | * | Amortization of acquired intangible assets | | | (473) | | | (173) | | Acquisition-related (charges)/income | | | 0 | | | (39) | | Non-operating retirement-related (costs)/income | | | (264) | | | (138) | | Eliminations of internal transactions | | | (55) | | | (89) | | Other—divested businesses | | | 25 | | | (56) | * | Unallocated corporate amounts | | | (284) | | | (67) | | Total pre-tax income from continuing operations | | $ | (49) | | $ | 1,883 | |
*Recast to conform to current year presentation.
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