IBM 2001 Annual Report Download - page 105

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Notes to Consolidated Financial Statements
INTERNATIONAL BUSINESS MACHINES CORPORATION
and Subsidiary Companies
103
RECONCILIATIONS TO IBM AS REPORTED
(dollars in millions) 2001 2000 1999
REVENUE:
Total reportable segments $«93,691 $«96,370 $«95,801
Other revenue and
adjustments (249) (34) 391
Elimination of internal
revenue (7,576) (7,940) (8,644)
Total IBM consolidated $«85,866 $«88,396 $«87,548
(dollars in millions) 2001 2000 1999
PRE-TAX INCOME:
Total reportable segments $«10,458 $«10,891 $«««9,971
Elimination of internal
transactions 108 62 (47)
Sale of Global Network ——4,057
1999 actions ——(2,205)
Unallocated corporate
amounts 387 581 (19)
Total IBM consolidated $«10,953 $«11,534 $«11,757
IMMATERIAL ITEMS
Investment in Equity Alliances and Equity Alliances Gains/Losses
The investments in equity alliances and the resulting gains
and losses from these investments that are attributable to the
segments do not have a significant effect on the financial
position or the financial results of the segments.
SEGMENT ASSETS AND OTHER ITEMS
The Global Services assets primarily are accounts receivable,
maintenance inventory, and plant, property and equipment
including those associated with the segment’s outsourcing
business. The assets of the Hardware segments primarily are
inventory and plant, property and equipment. The Software
segment assets mainly are plant, property and equipment,
and investment in capitalized software.
To accomplish the efficient use of the company’s space
and equipment, it usually is necessary for several segments to
share plant, property and equipment assets. Where assets are
shared, landlord ownership of the assets is assigned to one
segment and is not allocated to each user segment. This is
consistent with the company’s management system and is
reflected accordingly in the schedule on page 104. In those
cases, there will not be a precise correlation between seg-
ment pre-tax income and segment assets.
Similarly, the depreciation amounts reported by each
segment are based on the assigned landlord ownership and
may not be consistent with the amounts that are included in
the segments’ pre-tax income. The amounts that are
included in pre-tax income reflect occupancy charges from
the landlord segment and are not specifically identified by
the management reporting system.
Capital expenditures that are reported by each segment
also are in line with the landlord ownership basis of asset
assignment.
The Global Financing segment amounts on page 104 for
Interest income and Cost of Global Financing interest
expense reflect the interest income and interest expense
associated with the Global Financing business, as well as the
income from the investment in cash and marketable securities.
The reconciliation and explanation of the difference between
Cost of Global Financing and Interest expense for segment
presentation versus presentation on the Statement of
Consolidated Earnings are included on pages 66 and 67 of the
Management Discussion.
The segment information for 2000 and 1999 has been
reclassified to reflect the organizational changes and product
transfers between the segments in 2001.