“With the movement of spot rates over the last 90 days, currency translation would be fairly neutral to revenue in 2023 with a headwind in the first half, flipping to a tailwind in the second.”

In context

“ses and improved utilization. Infrastructure revenue is roughly flat over the midterm model horizon, with performance in any year reflecting product cycle dynamics. We're entering the year three quarters into the z16 cycle, and will also ramp on Power 10. As a result, we expect 2023 infrastructure revenue below its model and pre-tax margin in the low-teens. For perspective, infrastructure should impact IBM's overall revenue growth by over 1 point. With these segment dynamics, we would expect IBM's operating pretax margin to expand by about 0.5 point. That's in line with our model and our tax rate should be in the mid- to high-teens range. Let me comment on a few items within our expectations. First, as I said, currency was a significant headwind in 2022, impacting revenue by $3.5 billion. With the movement of spot rates over the last 90 days, currency translation would be fairly neutral to revenue in 2023 with a headwind in the first half, flipping to a tailwind in the second. But I'll remind you that we had over $650 million of hedging gains in 2022, which will not repeat in 2023, resulting in an impact to our profit and cash on a year-to-year basis. Second, as you know, we've taken a number of significant portfolio actions over the last couple of years, which has resulted in some stranded cost in our business. We expect to address these remaining stranded costs early in the year and anticipate a charge of about $300 million in the first quarter. We would start to see benefits in the second half and pay back by the end of the year. And then third, we regularly review the useful lives of our assets. Due to advances in technology, we are making an accounting change to extend the useful life of our server and networking equipment effective the 1st of January. Bas”