International Business Machines (IBM) 10-Q 2014 Q2 Quarterly report

EXHIBIT 12

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

FOR SIX MONTHS ENDED JUNE 30,

(UNAUDITED)

(Dollars in millions)	2014		2013
Income before income taxes (1)	$	8,159	$	7,759
Add: fixed charges, excluding capitalized interest		768		735
Income as adjusted before income taxes	$	8,927	$	8,494
Fixed charges:
Interest expense	$	519	$	491
Capitalized interest		3		17
Portion of rental expense representative of interest		249		244
Total fixed charges	$	771	$	752
Ratio of earnings to fixed charges		11.58		11.30
(1) Income before income taxes excludes (a) amortization of capitalized interest, and (b) the company's share in the income
and losses of less-than-fifty percent-owned affiliates.

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