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Segment Information | 12 Months Ended
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Dec. 31, 2013
Segment Information | 15. Segment information The company has two business segments: Services and Technology. The products and services of each segment are marketed throughout the world to commercial businesses and governments. Revenue classifications by segment are as follows: Services – systems integration and consulting, outsourcing, infrastructure services and core maintenance; Technology – enterprise-class software and servers and other technology. The accounting policies of each business segment are the same as those described in the summary of significant accounting policies. Intersegment sales and transfers are priced as if the sales or transfers were to third parties. Accordingly, the Technology segment recognizes intersegment revenue and manufacturing profit on hardware and software shipments to customers under Services contracts. The Services segment, in turn, recognizes customer revenue and marketing profit on such shipments of company hardware and software to customers. The Services segment also includes hardware and software products sourced from third parties that are sold to customers through the company’s Services channels. In the company’s consolidated statements of income, the manufacturing costs of products sourced from the Technology segment and sold to Services customers are reported in cost of revenue for Services. Also included in the Technology segment’s sales and operating profit are sales of hardware and software sold to the Services segment for internal use in Services engagements. The amount of such profit included in operating income of the Technology segment for the years ended December 31, 2013, 2012 and 2011, was $6.0 million, $11.5 million and $8.2 million, respectively. The profit on these transactions is eliminated in Corporate. The company evaluates business segment performance based on operating income exclusive of pension income or expense, restructuring charges and unusual and nonrecurring items, which are included in Corporate. All other corporate and centrally incurred costs are allocated to the business segments based principally on revenue, employees, square footage or usage. The 2012 changes in Corporate and eliminations operating income are principally due to increases in pension expense. No single customer accounts for more than 10% of revenue. Revenue from various agencies of the U.S. Government, which is reported in both business segments, was approximately $512 million, $523 million and $652 million in 2013, 2012 and 2011, respectively. Corporate assets are principally cash and cash equivalents, prepaid postretirement assets and deferred income taxes. The expense or income related to corporate assets is allocated to the business segments. Customer revenue by classes of similar products or services, by segment, is presented below:
Year ended December 31 (millions) |  | 2013 |  |  | 2012 |  |  | 2011 |
Services |  |  |  |  |  |  |  |  |  |  |  |
Systems integration and consulting |  | $ | 956.9 |  |  | $ | 1,079.3 |  |  | $ | 1,164.7 |
Outsourcing |  |  | 1,428.7 |  |  |  | 1,475.5 |  |  |  | 1,487.2 |
Infrastructure services |  |  | 428.1 |  |  |  | 442.4 |  |  |  | 487.0 |
Core maintenance |  |  | 182.4 |  |  |  | 195.2 |  |  |  | 215.7 |
|  |  | 2,996.1 |  |  |  | 3,192.4 |  |  |  | 3,354.6 |
Technology |  |  |  |  |  |  |  |  |  |  |  |
Enterprise-class software and servers |  |  | 402.7 |  |  |  | 480.3 |  |  |  | 443.9 |
Other technology |  |  | 57.7 |  |  |  | 33.7 |  |  |  | 55.3 |
|  |  | 460.4 |  |  |  | 514.0 |  |  |  | 499.2 |
Total |  | $ | 3,456.5 |  |  | $ | 3,706.4 |  |  | $ | 3,853.8 |
Presented below is a reconciliation of segment operating income to consolidated income before income taxes:
Year ended December 31 (millions) |  |  | 2013 |  |  |  | 2012 |  |  |  | 2011 |
Total segment operating income |  | $ | 309.6 |  |  | $ | 414.3 |  |  | $ | 360.1 |
Interest expense |  |  | (9.9 | ) |  |  | (27.5 | ) |  |  | (63.1 | )
Other income (expense), net |  |  | 9.8 |  |  |  | (37.6 | ) |  |  | (55.5 | )
Corporate and eliminations |  |  | (90.1 | ) |  |  | (95.1 | ) |  |  | (35.5 | )
Total income before income taxes |  | $ | 219.4 |  |  | $ | 254.1 |  |  | $ | 206.0 |
Presented below is a reconciliation of total business segment assets to consolidated assets:
December 31 (millions) |  |  | 2013 |  |  |  | 2012 |  |  |  | 2011 |
Total segment assets |  | $ | 1,530.5 |  |  | $ | 1,469.1 |  |  | $ | 1,555.9 |
Cash and cash equivalents |  |  | 639.8 |  |  |  | 655.6 |  |  |  | 714.9 |
Deferred income taxes |  |  | 136.4 |  |  |  | 184.3 |  |  |  | 208.6 |
Prepaid postretirement assets |  |  | 83.7 |  |  |  | 3.3 |  |  |  | 43.9 |
Other corporate assets |  |  | 119.6 |  |  |  | 108.1 |  |  |  | 88.9 |
Total assets |  | $ | 2,510.0 |  |  | $ | 2,420.4 |  |  | $ | 2,612.2 |
A summary of the company’s operations by business segment for 2013, 2012 and 2011 is presented below:
(millions) |  |  | Total |  |  |  | Corporate |  |  |  | Services |  |  |  | Technology |
2013 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer revenue |  | $ | 3,456.5 |  |  |  |  |  |  | $ | 2,996.1 |  |  | $ | 460.4 |
Intersegment |  |  |  |  |  | $ | (122.5 | ) |  |  | 1.7 |  |  |  | 120.8 |
Total revenue |  | $ | 3,456.5 |  |  | $ | (122.5 | ) |  | $ | 2,997.8 |  |  | $ | 581.2 |
Operating income |  | $ | 219.5 |  |  | $ | (90.1 | ) |  | $ | 186.7 |  |  | $ | 122.9 |
Depreciation and amortization |  |  | 159.6 |  |  |  |  |  |  |  | 91.8 |  |  |  | 67.8 |
Total assets |  |  | 2,510.0 |  |  |  | 979.5 |  |  |  | 1,126.7 |  |  |  | 403.8 |
Capital expenditures |  |  | 151.4 |  |  |  | 2.9 |  |  |  | 78.8 |  |  |  | 69.7 |
2012 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer revenue |  | $ | 3,706.4 |  |  |  |  |  |  | $ | 3,192.4 |  |  | $ | 514.0 |
Intersegment |  |  |  |  |  | $ | (123.1 | ) |  |  | 3.8 |  |  |  | 119.3 |
Total revenue |  | $ | 3,706.4 |  |  | $ | (123.1 | ) |  | $ | 3,196.2 |  |  | $ | 633.3 |
Operating income |  | $ | 319.2 |  |  | $ | (95.1 | ) |  | $ | 204.6 |  |  | $ | 209.7 |
Depreciation and amortization |  |  | 174.6 |  |  |  |  |  |  |  | 102.4 |  |  |  | 72.2 |
Total assets |  |  | 2,420.4 |  |  |  | 951.3 |  |  |  | 1,085.9 |  |  |  | 383.2 |
Capital expenditures |  |  | 132.6 |  |  |  | 3.7 |  |  |  | 64.7 |  |  |  | 64.2 |
2011 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer revenue |  | $ | 3,853.8 |  |  |  |  |  |  | $ | 3,354.6 |  |  | $ | 499.2 |
Intersegment |  |  |  |  |  | $ | (102.6 | ) |  |  | 6.3 |  |  |  | 96.3 |
Total revenue |  | $ | 3,853.8 |  |  | $ | (102.6 | ) |  | $ | 3,360.9 |  |  | $ | 595.5 |
Operating income |  | $ | 324.6 |  |  | $ | (35.5 | ) |  | $ | 231.8 |  |  | $ | 128.3 |
Depreciation and amortization |  |  | 194.8 |  |  |  |  |  |  |  | 116.4 |  |  |  | 78.4 |
Total assets |  |  | 2,612.2 |  |  |  | 1,056.3 |  |  |  | 1,164.7 |  |  |  | 391.2 |
Capital expenditures |  |  | 134.4 |  |  |  | 9.8 |  |  |  | 65.2 |  |  |  | 59.4 |
Geographic information about the company’s revenue, which is principally based on location of the selling organization, properties and outsourcing assets, is presented below:
Year ended December 31 (millions) |  |  | 2013 |  |  |  | 2012 |  |  |  | 2011 |
Revenue |  |  |  |  |  |  |  |  |  |  |  |
United States |  | $ | 1,370.6 |  |  | $ | 1,455.0 |  |  | $ | 1,577.9 |
United Kingdom |  |  | 414.0 |  |  |  | 496.9 |  |  |  | 408.7 |
Other foreign |  |  | 1,671.9 |  |  |  | 1,754.5 |  |  |  | 1,867.2 |
Total |  | $ | 3,456.5 |  |  | $ | 3,706.4 |  |  | $ | 3,853.8 |
Properties, net |  |  |  |  |  |  |  |  |  |  |  |
United States |  | $ | 112.4 |  |  | $ | 112.7 |  |  | $ | 127.1 |
United Kingdom |  |  | 24.7 |  |  |  | 23.1 |  |  |  | 22.1 |
Other foreign |  |  | 37.6 |  |  |  | 40.6 |  |  |  | 42.1 |
Total |  | $ | 174.7 |  |  | $ | 176.4 |  |  | $ | 191.3 |
Outsourcing assets, net |  |  |  |  |  |  |  |  |  |  |  |
United States |  | $ | 56.2 |  |  | $ | 67.1 |  |  | $ | 61.5 |
United Kingdom |  |  | 28.1 |  |  |  | 30.3 |  |  |  | 37.3 |
Other foreign |  |  | 31.2 |  |  |  | 28.9 |  |  |  | 39.1 |
Total |  | $ | 115.5 |  |  | $ | 126.3 |  |  | $ | 137.9 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8984-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8971-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599 + Details
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