TANDBERG — 2005 Annual Report

NOTE 2
SEGMENT INFORMATION

Segment information is presented in respect of the Group’s geographical segments. The primary format, geographical segments, is based on the Group’s management and internal reporting structure.

Inter-segment pricing is determined on an arm’s-length basis.

Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly operating profits generated by the Operations department in TANDBERG Telecom AS, in addition to corporate expenses.

The geographical segments are managed in geographical regions, Americas, APAC (Asia and Pacific) and EMEA (Europe, Middle East and Africa). In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers.

Operating assets are allocated based on the geographical location of the customer, while the operating liabilities are allocated based on the geographical location of the acquiring segment.

GEOGRAPHICAL SEGMENTS The following tables present revenues and operating profit information according to the Group’s geographical segments for the years ended 31 December 2005 and 2004.

IAS 14 allows only assets and liabilities that relate to the operations of the segment to be allocated to that segment. In the Group’s internal reporting system assets and liabilities, other than accounts receivable and accounts payable, are not attributed directly or allocated to the three segments on a reasonable basis. The Group has decided not to allocate jointly used assets and liabilities, as the allocation would have been arbitrary and not understandable.

BUSINESS SEGMENTS The Group comprises the sales of the following main products and services:
• End-points: Personal videosystems, small and large meeting room videosystems and vertical applications.
• Network products: Infrastructure including but limited to Boardercontroller, gateways, MCUs and MPSs.
• Services: Service contracts tied to end-points and network product sales. The following table presents revenue information regarding the Group’s business segment for the years ended 31 December 2005 and 2004.

All sales derive from the same product group or service related to the product group, and there is a high degree of similarity of growth opportunities, risk and earnings potential for the various products within the product and service portfolios. Therefore no business segments as defined in IAS 14 are reported.


			REAL PRODUCTIVITY FINANCIAL HIGHLIGHTS A LETTER FROM THE CEO REPORT OF THE BOARD OF DIRECTORS CONSOLIDATED INCOME STATEMENT CONSOLIDATED BALANCE SHEET CONSOLIDATED CASH FLOW STATEMENT CONSOLIDATED STATEMENT OF CHANGES IN EQUITY		NOTES 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 INCOME STATEMENT - TANDBERG asa BALANCE SHEET - TANDBERG asa CASH FLOW - TANDBERG asa NOTES - TANDBERG asa AUDITOR'S REPORT 2005 CORPORATE GOVERNANCE
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			NOTE 2 SEGMENT INFORMATION Segment information is presented in respect of the Group’s geographical segments. The primary format, geographical segments, is based on the Group’s management and internal reporting structure. Inter-segment pricing is determined on an arm’s-length basis. Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly operating profits generated by the Operations department in TANDBERG Telecom AS, in addition to corporate expenses. The geographical segments are managed in geographical regions, Americas, APAC (Asia and Pacific) and EMEA (Europe, Middle East and Africa). In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers. Operating assets are allocated based on the geographical location of the customer, while the operating liabilities are allocated based on the geographical location of the acquiring segment. GEOGRAPHICAL SEGMENTS The following tables present revenues and operating profit information according to the Group’s geographical segments for the years ended 31 December 2005 and 2004. IAS 14 allows only assets and liabilities that relate to the operations of the segment to be allocated to that segment. In the Group’s internal reporting system assets and liabilities, other than accounts receivable and accounts payable, are not attributed directly or allocated to the three segments on a reasonable basis. The Group has decided not to allocate jointly used assets and liabilities, as the allocation would have been arbitrary and not understandable. BUSINESS SEGMENTS The Group comprises the sales of the following main products and services: • End-points: Personal videosystems, small and large meeting room videosystems and vertical applications. • Network products: Infrastructure including but limited to Boardercontroller, gateways, MCUs and MPSs. • Services: Service contracts tied to end-points and network product sales. The following table presents revenue information regarding the Group’s business segment for the years ended 31 December 2005 and 2004. All sales derive from the same product group or service related to the product group, and there is a high degree of similarity of growth opportunities, risk and earnings potential for the various products within the product and service portfolios. Therefore no business segments as defined in IAS 14 are reported.

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