IBM 2011 Annual Report Download - page 139

Notes to Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies 137
Reconciliations of IBM as Reported
($ in millions)
For the year ended December 31: 2011 2010 2009
Revenue
Total reportable segments $114,440 $106,827 $102,524
Other revenue and adjustments 722 750 869
Elimination of internal transactions (8,246) (7,707) (7,635)
Total IBM consolidated revenue $106,916 $ 99,870 $ 95,758
($ in millions)
For the year ended December 31: 2011 2010* 2009*
Pre-tax income
Total reportable segments $22,904 $20,923 $19,323
Amortization of acquired
intangible assets (629) (512)(489)
Acquisition-related charges (46) (46)(9)
Non-operating retirement-
related (costs)/income 72 414 509
Elimination of internal transactions (1,243) (957)(744)
Unallocated corporate amounts** (56) (98)(453)
Total IBM consolidated
pre-tax income $21,003 $19,723 $18,138
* Reclassified to conform with 2011 presentation.
** The 2009 amount included a provision related to a joint venture investment, while
the 2010 amount included an adjustment of that provision as the venture was divested.
The 2009 and 2010 amounts included gains related to the divestiture of the printing
business.
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
did not have a material effect on the financial position or the financial
results of the segments.
Segment Assets and Other Items
Global Technology Services assets are primarily accounts receivable,
plant, property and equipment including the assets associated with
the outsourcing business, goodwill, acquired intangible assets,
deferred services arrangement transition costs and maintenance parts
inventory. Global Business Services assets are primarily goodwill
and accounts receivable. Software assets are mainly goodwill,
acquired intangible assets and accounts receivable. Systems and
Technology assets are primarily plant, property and equipment,
manufacturing inventory and accounts receivable. Global Financing
assets are primarily financing receivables and fixed assets under
operating leases.
To ensure the efficient use of the company’s space and equipment,
several segments may 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 table on page 138. 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 consistent with the
landlord ownership basis of asset assignment.
Global Financing amounts for interest income and interest
expense reflect the interest income and interest expense associated
with the Global Financing business, including the intercompany
financing activities discussed on page 24, as well as the income from
investment in cash and marketable securities. The explanation of the
difference between cost of financing and interest expense for segment
presentation versus presentation in the Consolidated Statement of
Earnings is included on page 66 of the Management Discussion.