IBM 2003 Annual Report Download - page 121

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119
Notes to Consolidated Financial Statements
INTERNATIONAL BUSINESS MACHINES CORPORATION AND SUBSIDIARY COMPANIES
Reconciliations to IBM as Reported
(dollars in millions)
FOR THE YEAR ENDED DECEMBER 31: 2003 2002 2001
Revenue:
Total reportable segments $«96,666 $«87,986 $«89,996
Other revenue and
adjustments 33 (103) (227)
Elimination of internal
revenue (7,568) (6,697) (6,702)
Total IBM consolidated $«89,131 $«81,186 $«83,067
(dollars in millions)
FOR THE YEAR ENDED DECEMBER 31: 2003 2002 2001
Pre-Tax Income:
Total reportable segments $«10,913 $«««8,436 $«11,009
Elimination of internal
transactions (55) (164) 108
Unallocated corporate
amounts 16 (748) 333
Total IBM consolidated $«10,874 $«««7,524 $«11,450
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 material 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,
goodwill, maintenance inventory, and plant, property and
equipment including those associated with the segment’s
outsourcing business. The Software segment assets mainly are
goodwill, plant, property and equipment, and investment in
capitalized software. The assets of the Hardware segments
primarily are inventory and plant, property and equipment.
The assets of the Global Financing segment are primarily
financing receivables and fixed assets under operating leases.
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 120. In those
cases, there will not be a precise correlation between segment
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 120
for Interest income and Cost of Global Financing interest
expense reflect the interest income and interest expense
associated with the Global Financing business, including
the intercompany financing activities discussed on page
69 as well as the income from the investment in cash and
marketable securities. The explanation of the difference
between Cost of Global Financing and Interest expense for
segment presentation versus presentation in the Consoli-
dated Statement of Earnings is included on page 73 of the
Management Discussion.