IBM 2005 Annual Report Download - page 98
Download and view the complete annual report
Please find page 98 of the 2005 IBM annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
1 -
2
-
3
-
4
-
5
-
6
-
7
-
8
-
9
-
10
-
11
-
12
-
13
-
14
-
15
-
16
-
17
-
18
-
19
-
20
-
21
-
22
-
23
-
24
-
25
-
26
-
27
-
28
-
29
-
30
-
31
-
32
-
33
-
34
-
35
-
36
-
37
-
38
-
39
-
40
-
41
-
42
-
43
-
44
-
45
-
46
-
47
-
48
-
49
-
50
-
51
-
52
-
53
-
54
-
55
-
56
-
57
-
58
-
59
-
60
-
61
-
62
-
63
-
64
-
65
-
66
-
67
-
68
-
69
-
70
-
71
-
72
-
73
-
74
-
75
-
76
-
77
-
78
-
79
-
80
-
81
-
82
-
83
-
84
-
85
-
86
-
87
-
88 -
89 -
90 -
91 -
92 -
93 -
94 -
95 -
96 -
97 -
98 -
99 -
100 -
101 -
102 -
103 -
104 -
105
 |
 |
_97
NotestoConsolidatedFinancialStatements
INTERNATIONALBUSINESSMACHINESCORPORATION ANDSUBSIDIARYCOMPANIES
_97
(Dollarsinmillions)
FORTHEYEARENDEDDECEMBER31: 2005 2004 2003
Revenue:
Totalreportablesegments $«98,097 $«103,259 $«95,485
Otherrevenueand
adjustments 563 489 437
Eliminationofinternal
revenue (7,526) (7,455) (6,791)
TotalIBMconsolidated $«91,134 $«««96,293 $«89,131
(Dollarsinmillions)
FOR THE YEARENDEDDECEMBER31: 2005 2004 2003
Pre-TaxIncome:
Totalreportablesegments $«11,503 $«««11,545 $«««9,459
Eliminationofinternal
transactions (166) (152) (89)
Unallocatedcorporate
amounts 889 (724) 47
TotalIBMconsolidated $«12,226 $«««10,669 $«««9,417
Within pre-tax income, unallocated corporate amounts in the
current year include the gain from the sale of the company’s
PersonalComputingbusinesstoLenovo,theimpactofthelegal
settlement with Microsoft Corporation, pension curtailment
related charges and unallocated charges related to the com-
pany’sincrementalrestructuringactionsinthesecondquarterof
2005.Theprioryearincludeschargesforthepartialsettlement
ofcertainlegalclaimsagainstthecompany’s PPP andcharges
forcertainlitigation-relatedexpenses.
Immaterial Items
INVESTMENT IN EQUITY ALLIANCES AND EQUITY
ALLIANCES GAINS/(LOSSES)
Theinvestmentsinequityalliancesandtheresultinggainsand
(losses)fromtheseinvestmentsthatareattributabletotheseg-
mentsdonothaveamaterialeffectonthefinancialpositionor
thefinancialresultsofthesegments.
SegmentAssetsandOtherItems
The Global Services assets are primarily accounts receivable,
goodwill,maintenance parts inventory, andplant, property and
equipment including those associated with the segment’s out-
sourcing business. The Software segment assets are mainly
goodwill,plant,propertyandequipment,andinvestmentincap-
italized software. The assets of the Systems and Technology
GroupsegmentandthePersonalComputingDivision areprimarily
manufacturing inventoryandplant,propertyandequipment.The
assetsoftheGlobalFinancing segment areprimarilyfinancing
receivablesandfixedassetsunderoperatingleases.
Toaccomplishtheefficientuseofthecompany’sspaceand
equipment,itusuallyisnecessaryforseveralsegmentstoshare
plant,propertyandequipmentassets.Whereassetsareshared,
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
accordinglyinthescheduleonpage 98.Inthosecases,there
will not be a precise correlation between segment pre-tax
incomeandsegmentassets.
Similarly, the depreciation amounts reported by each seg-
mentarebasedontheassignedlandlordownershipandmaynot
beconsistentwiththeamountsthatareincludedinthesegments’
pre-taxincome.Theamountsthatareincludedinpre-taxincome
reflectoccupancychargesfromthelandlordsegmentandarenot
specifically identified by the management reporting system.
Capitalexpendituresthatarereportedbyeachsegmentalsoare
consistent withthelandlordownershipbasisofassetassignment.
The Global Financing segment amounts on page 98 for
InterestincomeandCostofGlobalFinancinginterestexpense
reflecttheinterestincomeandinterestexpenseassociatedwith
the Global Financing business, including the intercompany
financingactivitiesdiscussedonpage 43, aswellastheincome
from the investment in cash and marketable securities. The
explanationofthedifferencebetweenCostofGlobalFinancing
andInterestexpenseforsegmentpresentationversuspresenta-
tion in the Consolidated Statement of Earnings is included on
page 46 oftheManagementDiscussion.
As discussed in note U, “Stock-Based Compensation” on
pages83to85,thecompanyadoptedthefairvaluemethodof
accountingforstock-basedawardsgrantedtoemployees.The
deferredtaxassetlinewithinthefollowing“ReconciliationtoIBM
asReported,” includestheimpactofthisaccountingchange.