Segment Information (Tables)

6 Months Ended

Sep. 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 and six months ended September 30, 2018 and 2017 was as follows:



	Three Months Ended September 30,					Six Months Ended September 30,
	2018			2017		2018			2017
	(in millions)
Revenue by segment:
Mainframe Solutions	$	548		$	539	$	1,101		$	1,075
Enterprise Solutions	423			420		848			834
Services	74			75		148			150
Total segment revenue	$	1,045		$	1,034	$	2,097		$	2,059
Impact of segment policies that differ from U.S. GAAP ⁽¹⁾	(150		)	—		(264		)	—
Total consolidated revenue	$	895		$	1,034	$	1,833		$	2,059


(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 and six months ended September 30, 2018 and 2017 was as follows:



	Three Months Ended September 30,					Six Months Ended September 30,
	2018			2017		2018			2017
	(in millions)
Segment profit:
Mainframe Solutions	$	354		$	351	$	724		$	700
Enterprise Solutions	54			40		114			73
Services	4			1		4			2
Total segment profit	$	412		$	392	$	842		$	775
Impact of segment policies that differ from U.S. GAAP ⁽¹⁾	(150		)	—		(267		)	—
Less unallocated amounts:
Purchased software amortization	47			58		102			116
Other intangibles amortization	11			10		21			20
Internally developed software products amortization	2			9		7			21
Share-based compensation expense	35			29		68			61
Other expenses, net ⁽²⁾	—			4		108			12
Interest expense, net	19			24		39			49
Income before income taxes	$	148		$	258	$	230		$	496


(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 and six months ended September 30, 2018 consisted of costs associated with the Fiscal 2019 Plan of $(1) million and $113 million, respectively, certain foreign exchange derivative hedging gains and losses, and other miscellaneous costs. Other expenses, net for the three and six months ended September 30, 2017 consisted of costs associated with certain foreign exchange derivative hedging gains and losses, and other miscellaneous costs.

Summary of depreciation by segment

Depreciation by segment for the three and six months ended September 30, 2018 and 2017 was as follows:



	Three Months Ended September 30,				Six Months Ended September 30,
	2018		2017		2018		2017
	(in millions)
Depreciation:
Mainframe Solutions	$	10	$	10	$	19	$	19
Enterprise Solutions	7		7		14		14
Services	—		—		—		—
Total depreciation	$	17	$	17	$	33	$	33