Note 14. Segment and Geographic Information
Segment Information
In reporting to management during 2000, Merrill Lynch's operating results were categorized into three business segments: the Corporate and Institutional Client Group ("CICG"), the Private Client Group ("PCG") and Merrill Lynch Investment Managers ("MLIM"). Prior period amounts have been restated to conform to the 2000 presentation. For information on each segment's activities, see Management's Discussion and Analysis (unaudited) - Business Segments.

The principal methodology used in preparing the segment results in the table that follows is:

• Revenues and expenses are assigned to segments where directly attributable.
  
• Principal transaction and investment banking revenues and related costs resulting from the client activities of PCG are allocated among CICG and PCG based on production credits, share counts, trade counts, and other measures which estimate relative value.
  
• Revenues and expenses related to certain retail money market funds comprising an average of $111 billion, $118 billion and $107 billion in assets under management in 2000, 1999 and 1998, respectively are assigned to PCG.
  
• The 401(k) business is reported as a 50/50 joint venture between MLIM and PCG.
  
• Revenues and expenses related to mutual fund shares bearing a contingent deferred sales charge are reflected in segment results as if MLIM and PCG were unrelated entities.
  
• Interest (cost of carry) is allocated based on management's assessment of the relative risk of segment assets and liabilities.
  
• Goodwill amortization, Mercury financing costs, and the staff reduction provision are not attributed to segments because management excludes these items from segment operating results in evaluating segment performance. The elimination of intersegment revenues and expenses is also included in Corporate items (including intersegment eliminations).
  
• Residual revenues and expenses (i.e., those related to overhead and support units) are attributed to segments based on specific methodologies (e.g., headcount, square footage, intersegment agreements).

Management believes that the following information by business segment provides a reasonable representation of each segment's contribution to the consolidated amounts:

1. Includes the elimination of intersegment revenues and, in 2000, 33% of the loss on the HSBC joint venture.
   
2. Management views interest income net of interest expense in evaluating results.
   
3. Represents Mercury financing costs.
   
4. Represents goodwill amortization of $217, $227, and $227 net of elimination of intersegment expenses and other corporate items of $236, $202, and $273 for 2000, 1999, and 1998, respectively.
   
5. Had this amount been allocated to segments, $259, $88, and $83 would have been allocated to CICG, PCG, and MLIM, respectively.

Geographic Information
Merrill Lynch operates in both U.S. and non-U.S. markets. Merrill Lynch's non-U.S. business activities are conducted through offices in five regions:

• Europe, Middle East and Africa,
  
• Japan,
  
• Asia Pacific/Australia,
  
• Canada, and
  
• Latin America.

For further information on activities in these regions, see Management's Discussion and Analysis (unaudited) - Global Operations.

The principal methodology used in preparing the geographic data in the table that follows is:

• Commissions revenues are recorded based on client location,
  
• Trading revenues are principally recorded based on the location of the trader,
  
• Investment banking revenues are recorded based on the location of the client,
  
• Asset management and portfolio service fees are recorded based on the location of the client,
  
• Earnings before income taxes include the allocation of certain shared expenses among regions, and
  
• Intercompany transfers are based primarily on service agreements.

The information that follows, in management's judgment, provides a reasonable representation of each region's contribution to the consolidated amounts.

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