IBM 2014 Annual Report Download - page 148

Notes to Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
147
Reconciliations of IBM as Reported
($ in millions)
For the year ended December 31: 2014 2013*2012*
Revenue
Total reportable segments $100,527 $105,732 $110,193
Other revenue and adjustments 374 478 577
Elimination of internal transactions (8,108) (7,843)(7,896)
Total IBM consolidated revenue $ 92,793 $ 98,367 $102,874
($ in millions)
For the year ended December 31: 2014 2013*2012*
Pre-tax income from
continuing operations:
Total reportable segments $22,262 $23,687 $24,653
Amortization of acquired
intangible assets (791) (758)(703)
Acquisition-related charges (12) (46)(36)
Non-operating retirement-
related (costs)/income (353) (1,062)(538)
Elimination of internal transactions (1,914) (1,480)(1,197)
Unallocated corporate amounts** 795 (98)361
Total income from continuing
operations, before tax $19,986 $20,244 $22,540
* Reclassified to reflect discontinued operations presentation.
** The 2014, 2013 and 2012 amounts include the gain related to the Retail Store Solutions
divestiture. The 2014 amount also includes the net gain related to the industry stan-
dard server divestiture.
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 seg-
ments 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 outsourc-
ing business, goodwill, accounts receivable, deferred services
arrangement transition costs, maintenance parts inventory and
acquired intangible assets. Global Business Services assets are
primarily goodwill and accounts receivable. Software assets are
mainly goodwill, acquired intangible assets and accounts receiv-
able. Systems and Technology assets are primarily plant, property
and equipment, goodwill, manufacturing inventory and accounts
receivable. Global Financing assets are primarily financing receiv-
ables 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 148. 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 inter-
est expense reflect the interest income and interest expense
associated with the Global Financing business, including the
intercompany financing activities discussed on page 31, 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 76 of
the Management Discussion.