IBM 2010 Annual Report Download - page 130

Notes to Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies128
Reconciliations of IBM as Reported
($ in millions)
For the year ended December 31: 2010 2009 2008
Revenue:
Total reportable segments $106,827 $102,524 $110,951
Other revenue and adjustments 750 869 803
Elimination of internal revenue (7,707) (7,635) (8,125)
Total IBM consolidated revenue $ 99,870 $ 95,758 $103,630
($ in millions)
For the year ended December 31: 2010 2009 2008
Pre-Tax Income:
Total reportable segments $20,778 $19,335 $17,531
Elimination of internal transactions (957) (744) (433)
Unallocated corporate amounts* (98) (453) (382)
Total IBM consolidated pre-tax income $19,723 $18,138 $16,715
* 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 2008, 2009 and 2010 amounts included gains related to the divesti-
ture of the printing business and the 2008 amount also included gains related to
the sale of Lenovo 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 accounts receiv-
able, plant, property and equipment including the assets associ-
ated with the segment’s 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 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
segment. This is consistent with the company’s management
system and is reflected accordingly in the table on page 129. 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 23, 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 58 of the Management
Discussion.