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49
comprised of federal, state and local government entities and educational institutions. In accordance with
Statement of Financial Accounting Standards No. 131, “Disclosure about Segments of an Enterprise and
Related Information,” the internal organization that is used by management for making operating decisions
and assessing performance is the source of our reportable segments.
The accounting policies of the segments are the same as those described in Note 3, “Summary of Significant
Accounting Policies.” We allocate resources to and evaluate performance of our segments based on both
sales and operating income. Our corporate segment provides purchasing, merchandising, financial,
information technology, marketing, distribution and fulfillment services to the public sector segment.
Certain elements of gross margin and operating expenses are subject to intercompany service agreements
which provide for, among other things, a mark-up on intercompany sales and allocation of indirect expenses
such as occupancy, operations and other support, payroll, training and benefits. The table below presents
information about our reportable segments:
Year Ended December 31, 2003 (in 000’s)
Corporate Public Sector Eliminations Consolidated
External customer sales $ 3,575,483 $ 1,089,133 $ - $ 4,664,616
Transfers between segments 1,030,704 - (1,030,704) -
Total net sales $ 4,606,187 $ 1,089,133 $ (1,030,704) $ 4,664,616
Income from operations $ 256,557 $ 27,901 $ - $ 284,458
Net interest income and
other expense 5,106
Income before income taxes $ 289,564
Total assets $ 1,309,970 $ 175,034 $ (173,372) $ 1,311,632
Year Ended December 31, 2002 (in 000’s)
Corporate Public Sector Eliminations Consolidated
External customer sales $ 3,399,118 $ 865,461 $ - $ 4,264,579
Transfers between segments 823,086 - (823,086) -
Total net sales $ 4,222,204 $ 865,461 $ (823,086) $ 4,264,579
Income from operations $ 281,911 $ 16,267 $ - $ 298,178
Net interest income and
other expense 8,019
Income before income taxes $ 306,197
Total assets $ 1,034,795 $ 64,348 $ (3,479) $ 1,095,664