Segments

9 Months Ended

Sep. 30, 2021

Segments

Segments

4. Segments:

Our reportable segments correspond to how we have historically organized and managed the business and are aligned to key geographic markets in which Kyndryl operates. Segment results do not include any impacts associated with intercompany transactions between the segments. Our reportable segments are:

Americas: This segment comprises Kyndryl’s operations in North and Latin America, and includes countries such as, but not limited to, the United States, Canada, Brazil, Mexico, Peru, Argentina, Colombia, and Chile.

Europe, the Middle East and Africa (“EMEA”): This segment comprises Kyndryl’s operations in Europe, the Middle East and Africa and includes countries such as, but not limited to, France, Spain, Germany, Italy, the United Kingdom, Turkey, Israel, Saudi Arabia, South Africa, Egypt and Nigeria.

Japan: This segment comprises Kyndryl’s operations in Japan.

Asia Pacific: This segment comprises Kyndryl’s operations in Asia and Oceania, excluding Japan, and includes countries such as, but not limited to, Australia, India, Singapore, Korea, China, Thailand, the Philippines and New Zealand.

As a result of the Separation, in the fourth quarter of 2021 we will evaluate whether to recast our geographic segments to reflect management’s updated view of the business.

From time to time, our geographic markets work together to sell and implement certain contracts. The resulting revenues and costs from these contracts may be apportioned among the participating geographic markets. The economic environment and its effects on the industries served by our geographic markets affect revenues and operating expenses within our geographic markets to differing degrees. Local currency fluctuations also tend to affect our geographic markets differently, depending on the geographic concentrations and locations of their businesses.

The following tables reflect the results of the Company’s segments consistent with the management measurement system that has been utilized within the Company. Performance measurement is based on pretax income. These results have been used, in part, by the chief operating decision maker, both in evaluating the performance of, and in allocating resources to, each of the segments.

(Dollars in millions)
For the three months ended September 30,	Americas		EMEA		Japan		Asia Pacific		Total
2021
External revenue	$	1,641	$	1,717	$	719	$	358	$	4,434
Related party revenue		97		23		10		14		144
Total revenue	$	1,737	$	1,741	$	729	$	372	$	4,579
Pretax income (loss)	$	(89)	$	(381)	$	23	$	(23)	$	(469)
2020
External revenue	$	1,745	$	1,807	$	752	$	392	$	4,696
Related party revenue		96		29		17		18		161
Total revenue	$	1,841	$	1,837	$	769	$	410	$	4,856
Pretax income (loss)	$	(13)	$	(280)	$	56	$	66	$	(170)

(Dollars in millions)
For the nine months ended September 30,	Americas		EMEA		Japan		Asia Pacific		Total
2021
External revenue	$	5,056	$	5,293	$	2,194	$	1,114	$	13,657
Related party revenue		278		78		42		47		445
Total revenue	$	5,334	$	5,370	$	2,236	$	1,161	$	14,102
Pretax income (loss)	$	(211)	$	(1,126)	$	78	$	68	$	(1,191)
2020
External revenue	$	5,269	$	5,301	$	2,204	$	1,168	$	13,941
Related party revenue		284		92		53		54		483
Total revenue	$	5,553	$	5,394	$	2,257	$	1,222	$	14,425
Pretax income (loss)	$	(230)	$	(1,101)	$	131	$	149	$	(1,050)