Segment Information (Tables)

3 Months Ended

Jun. 30, 2018

Summary of segment revenue and reconciliation to total consolidated revenue

The Company’s summary of segment revenue and reconciliation to total consolidated revenue for the three months ended June 30, 2018 and 2017 was as follows:



	Three Months Ended June 30,
	2018			2017
	(in millions)
Revenue by segment:
Mainframe Solutions	$	553		$	536
Enterprise Solutions	425			414
Services	74			75
Total segment revenue	$	1,052		$	1,025
Impact of segment policies that differ from U.S. GAAP ⁽¹⁾	(114		)	—
Total consolidated revenue	$	938		$	1,025


(1)	The manner in which the Company measures and recognizes revenues for segment reporting was not revised upon adoption of Topic 606. For segment reporting purposes, the Company follows its previous Topic 605 policies, which recognizes software license revenue ratably, except for sales of perpetual licenses on a stand-alone basis, which are recognized at a point-in-time.

Summary of segment profit and reconciliation to income before income taxes

The Company’s summary of segment profit and reconciliation to income before income taxes for the three months ended June 30, 2018 and 2017 was as follows:



	Three Months Ended June 30,
	2018			2017
	(in millions)
Segment profit:
Mainframe Solutions	$	370		$	349
Enterprise Solutions	60			33
Services	—			1
Total segment profit	$	430		$	383
Impact of segment policies that differ from U.S. GAAP ⁽¹⁾	(117		)	—
Less unallocated amounts:
Purchased software amortization	55			58
Other intangibles amortization	10			10
Internally developed software products amortization	5			12
Share-based compensation expense	33			32
Other expenses, net ⁽²⁾	108			8
Interest expense, net	20			25
Income before income taxes	$	82		$	238


(1)	The manner in which the Company measures and recognizes revenues and expenses, including commissions, for segment reporting was not revised upon adoption of Topic 606. For segment reporting purposes, commissions are expensed in the period earned by the employee.

(2)

Other expenses, net for the three months ended June 30, 2018 consisted of costs associated with the Fiscal 2019 Plan of $114 million, certain foreign exchange derivative hedging gains and losses, and other miscellaneous costs. Other expenses, net for the three months ended June 30, 2017 consisted of costs associated with certain foreign exchange derivative hedging gains and losses, and other miscellaneous costs.