Management Discussion International Business Machines Corporation and Subsidiary Companies YEAR IN REVIEW Results of Continuing Operation Segment Details The following is an analysis of the 2019 versus 2018 reportable segment results. The t external revenue and gross margin results. Segment pre-tax income includes tramad reflect an arm's-length transfer price and excludes certain unallocated corporate iter For the year ended Dec Reverse Cloud & Cognitive Software 2019 $23,200 Gross margin 76.7% Global Business Services 16.634 Gross mar 27.3% Global Technology Services 27,361 Cross margin 34.8% Systems 7,404 Gross margin 53.1% Global Financing Cross margin Other Gross margin Total consolidated 1,400 35.6% 47% $77,347 $36,488 47.3% Total consolidated gross profit Total consolidated gross margin Non-operating adjustments Amortization of acquired intangible assets Acquisition-related charg Operating (non-GAAP) groprofit Operating (non-GAAP) gross margin 534 13 $37,035 48.0% **3009 wwwImpacted by Red Hat purchase accounting and acqubillion-related activity. +0.2 percent acting divested businesses and ad Cloud & Cognitive Software For the year ended December 21: Cloud & Cognitive Software external revenue Cognitive Applications Cloud & Data Platforms Transaction Processing Platform *Recall **3009 www Impacted by ed al purchase according 3019 $21,200 $ 5,765 9.499 7,935 68 Consolidated Income Statement International Business Machines Corporation and Subsidiary Companies ($in millions except per share amounts) For the year ended December 31: Revenue Services Sales Financing Total revenue Cost Services Sales Financing Total cost Gross profit Notes 2019 $47,493 28,252 1,402 77,147 32,491 7,263 904 40,659 36,488 Expense and other (income) Selling, general and administrative 20,604 Research, development and engineering F 5,989 Intellectual property and custom development income (648) Other (income) and expense (968) Interest expense P&T 1,344 Total expense and other (income) 26,322 Income from continuing operations before income taxes 10,166 Provision for income taxes G 731 Income from continuing operations 9,435 Income/(loss) from discontinued operations, net of tax (4) Net income $ 9,431 Earnings/(loss) per share of common stock Assuming dilution Continuing operations Discontinued operations H $ 10.57 (0.01) Total $10.56 Basic Continuing operations H $10.63 Discontinued operations H 0.00 Total $10.63 Weighted-average number of common shares outstanding Assuming dilution Basic 892,813,376 887,235,105 *Reclassified to conform to 2019 presentation. Refer to "Basis of Presentation" in note A, "Significant Accounting Amounts may not add due to rounding.