IBM 2012 Annual Report Download - page 137

136 Notes to Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
136
Reconciliations of IBM as Reported
($ in millions)
For the year ended December 31: 2012 2011 2010
Revenue
Total reportable segments $111,826 $114,440 $106,827
Other revenue and adjustments 577 722 750
Elimination of internal transactions (7,896) (8,246)(7,707)
Total IBM consolidated revenue $104,507 $106,916 $ 99,870
($ in millions)
For the year ended December 31: 2012 2011 2010
Pre-tax income
Total reportable segments $24,015 $22,904 $20,923
Amortization of acquired
intangible assets (703) (629)(512)
Acquisition-related charges (36) (46)(46)
Non-operating retirement-
related (costs)/income (538) 72 414
Elimination of internal transactions (1,197) (1,243)(957)
Unallocated corporate amounts* 361 (56)(98)
Total IBM consolidated
pre-tax income $21,902 $21,003 $19,723
* The 2012 amount includes the gain related to the Retail Store Solutions divestiture.
The 2011 amount includes gains related to the sale of Lenovo common stock.
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 plant, property and
equipment including the assets associated with the outsourcing
business, accounts receivable, 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,
goodwill, 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 equip-
ment, 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 seg-
ment. This is consistent with the company’s management system
and is reflected accordingly in the table on page 137. 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 con-
sistent 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 specifi-
cally 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.