IBM 2008 Annual Report Download - page 27
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Management Discussion
INTERNATIONAL BUSINESS MACHINES CORPORATION and Subsidiary Companies
Year in Review
Segment Details
The following is an analysis of the versus reportable segment results. The analysis of versus reportable segment results is
on pages to .
The following table presents each reportable segment’s external revenue and gross margin results.
($ )
Yr.-to -Yr. Yr.-to-Yr.
Percent/ Percent Change
Margin Adjusted
For the year ended December : 2008 2007 Change for Currency
Revenue:
Global Technology Services $ 39,264 $36,103 8.8% 5.8%
Gross margin 32.6% 29.9% 2.7 pts.
Global Business Services 19,628 18,041 8.8% 5.1%
Gross margin 26.7% 23.5% 3.2 pts.
Software 22,089 19,982 10.5% 8.2%
Gross margin 85.4% 85.2% 0.2 pts.
Systems and Technology 19,287 21,317 (9.5)% (10.8)%
Gross margin 38.1% 39.7% (1.7) pts.
Global Financing 2,559 2,502 2.3% 0.3%
Gross margin 51.3% 46.7% 4.6 pts.
Other 803 842 (4.6)% (5.9)%
Gross margin 13.4% 4.4% 9.1 pts.
TOTAL REVENUE $103,630 $98,786 4.9% 2.3%
Gross profit $ 45,661 $41,729 9.4%
Gross margin 44.1% 42.2% 1.8 pts.
The following table presents each reportable segment’s external revenue as a percentage of total segment revenue and each reportable segment’s
pre-tax income as a percentage of total segment pre-tax income.
Revenue Pre-tax Income*
For the year ended December : 2008 2007 2008 2007
Global Technology Services 38.2% 36.9% 26.3% 23.5%
Global Business Services 19.1 18.4 15.3 13.6
Total Global Services 57.3 55.3 41.6 37.1
Software 21.5 20.4 40.4 39.6
Systems and Technology 18.8 21.8 8.8 14.2
Global Financing 2.5 2.6 9.2 9.1
TOTAL 100.0% 100.0% 100.0% 100.0%
* Segment pre-tax income includes transactions between segments that are intended to reflect an arm’s-length transfer price.