Xerox 2002 Annual Report Download - page 63

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61
Note 9 — Segment Reporting
Our reportable segments are consistent with how we
manage the business and how we view the markets
we serve. Our reportable segments are as follows:
Production, Office, DMO, SOHO, and Other. The
accounting policies of the operating segments are the
same as those described in the summary of
significant accounting policies.
The Production segment includes our DocuTech
family of products, production printing, color
products for the production and graphic arts markets
and light-lens copiers over 90 pages per minute sold
to Fortune 1000, graphic arts and government, educa-
tion and other public sector customers predominantly
through direct sales channels in North America and
Europe.
The Office segment includes our family of Docu-
ment Centre digital multifunction products, color
laser, solid ink and monochrome laser desktop print-
ers, digital and light-lens copiers under 90 pages per
minute, and facsimile products sold through direct
and indirect sales channels in North America and
Europe. The Office market is comprised of global,
national and mid-size commercial customers as well
as government, education and other public sector
customers.
The DMO segment includes our operations in Latin
America, the Middle East, India, Eurasia, Russia and
Africa. This segment includes sales of products that
are typical to the aforementioned segments, however
management serves and evaluates these markets on
an aggregate geographic, rather than product, basis.
The SOHO segment includes inkjet printers and
personal copiers sold through indirect channels in
North America and Europe to small offices, home
offices and personal users (consumers). As more fully
discussed in Note 2, in June 2001 we announced the
disengagement from the worldwide SOHO business.
The segment classified as Other, includes several
units, none of which met the thresholds for separate
segment reporting. This group primarily includes
Xerox Supplies Group (“XSG”) (predominantly
paper), XES, Xerox Connect (“XConnect”), Xerox
Technology Enterprises (“XTE”) and consulting serv-
ices, royalty and license revenues. Other segment
profit (loss) includes the operating results from paper
sales and these entities, other less significant
businesses, our equity income from Fuji Xerox, and
certain costs which have not been allocated to the
businesses including non-financing interest and other
non-allocated costs. Other segments’ total assets
include XES, XSG, and our investment in Fuji Xerox.
Operating segment information for 2001 has been
adjusted to reflect a change in operating segment
structure that was made in 2002. The nature of the
changes related primarily to corporate expense and
other allocations associated with internal reorganiza-
tions made in 2002, as well as decisions concerning
direct applicability of certain overhead expenses to
the segments. The adjustments increased (decreased)
full year 2001 revenues as follows: Production – ($16),
Office – ($16), DMO – ($1), SOHO – $3 and Other – $30.
The full year 2001 segment profit was increased
(decreased) as follows: Production – $12, Office – $24,
DMO – $32, SOHO – $2 and Other – ($70). The operat-
ing segment information for 2000 has not been restat-
ed as it was impracticable to do so. Therefore, we
have presented 2002 and 2001 on the new basis and
2002, 2001 and 2000 on the old basis.