QuickLinks -- Click here to rapidly navigate through this documentEXHIBIT 12
COMPUTATION OF RATIO OF INCOME
FROM CONTINUING OPERATIONS TO FIXED CHARGES
(UNAUDITED)
| | For Nine Months Ended
|
|---|
| | September 30, 2003
| | September 30, 2002
|
|---|
| | (Dollars in millions)
|
|---|
| Income from continuing operations before income taxes (1) | | $ | 6,989 | | $ | 4,821 |
| Add: Fixed charges, excluding capitalized interest | | | 843 | | | 939 |
| | |
| |
|
Income as adjusted before income taxes |
|
$ |
7,832 |
|
$ |
5,760 |
| | |
| |
|
| Fixed charges: | | | | | | |
| | Interest expense | | $ | 501 | | $ | 594 |
| | Capitalized interest | | | 11 | | | 32 |
| | Portion of rental expense representative of interest | | | 342 | | | 345 |
| | |
| |
|
Total fixed charges |
|
$ |
854 |
|
$ |
971 |
| | |
| |
|
| Ratio of income from continuing operations to fixed charges | | | 9.17 | | | 5.93 |
- (1)
- Income from continuing operations 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.
SEGMENT INFORMATION—ON CONTINUING OPERATIONS BASIS
(UNAUDITED)
| |
| | Hardware Segments
| |
| |
| |
| |
| |
|---|
| | Global
Services
| | Systems
Group
| | Personal
Systems
Group
| | Technology
Group
| | Software
| | Global
Financing
| | Enterprise
Investments
| | Total
Segments
| |
|---|
(Dollars in millions)
| |
| |
| |
| |
| |
| |
| |
| |
| |
|---|
| Three Months Ended September 30, 2003: | | | | | | | | | | | | | | | | | | | | | | | | | |
External revenue |
|
$ |
10,383 |
|
$ |
3,199 |
|
$ |
2,796 |
|
$ |
695 |
|
$ |
3,461 |
|
$ |
713 |
|
$ |
257 |
|
$ |
21,504 |
|
| Internal revenue | | | 691 | | | 209 | | | 43 | | | 187 | | | 370 | | | 266 | | | 2 | | | 1,768 | |
| | |
| |
| |
| |
| |
| |
| |
| |
| |
| Total revenue | | $ | 11,074 | | $ | 3,408 | | $ | 2,839 | | $ | 882 | | $ | 3,831 | | $ | 979 | | $ | 259 | | $ | 23,272 | |
| | |
| |
| |
| |
| |
| |
| |
| |
| |
| Pre-tax income (loss) | | $ | 1,210 | | $ | 387 | | $ | (50 | ) | $ | (96 | ) | $ | 858 | | $ | 292 | | $ | (54 | ) | $ | 2,547 | |
| | |
| |
| |
| |
| |
| |
| |
| |
| |
Revenue year-to-year change |
|
|
15.3 |
% |
|
5.6 |
% |
|
2.5 |
% |
|
(29.6 |
)% |
|
12.3 |
% |
|
(4.7 |
)% |
|
7.5 |
% |
|
8.1 |
% |
| Pre-tax income year-to-year change | | | (3.9 | )% | | 1.6 | % | | (150.0 | )% | | (464.7 | )% | | 7.4 | % | | 33.9 | % | | 22.9 | % | | (0.1 | )% |
| Pre-tax income margin | | | 10.9 | % | | 11.4 | % | | (1.8 | )% | | (10.9 | )% | | 22.4 | % | | 29.8 | % | | (20.8 | )% | | 10.9 | % |
Three Months Ended September 30, 2002: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External revenue |
|
$ |
8,895 |
|
$ |
3,028 |
|
$ |
2,736 |
|
$ |
1,039 |
|
$ |
3,110 |
|
$ |
789 |
|
$ |
240 |
|
$ |
19,837 |
|
| Internal revenue | | | 708 | | | 200 | | | 33 | | | 214 | | | 302 | | | 238 | | | 1 | | | 1,696 | |
| | |
| |
| |
| |
| |
| |
| |
| |
| |
| Total revenue | | $ | 9,603 | | $ | 3,228 | | $ | 2,769 | | $ | 1,253 | | $ | 3,412 | | $ | 1,027 | | $ | 241 | | $ | 21,533 | |
| | |
| |
| |
| |
| |
| |
| |
| |
| |
| Pre-tax income (loss) | | $ | 1,259 | | $ | 381 | | $ | (20 | ) | $ | (17 | ) | $ | 799 | | $ | 218 | | $ | (70 | ) | $ | 2,550 | |
| | |
| |
| |
| |
| |
| |
| |
| |
| |
| Pre-tax income margin | | | 13.1 | % | | 11.8 | % | | (0.7 | )% | | (1.4 | )% | | 23.4 | % | | 21.2 | % | | (29.0 | )% | | 11.8 | % |
Reconciliations to IBM as Reported:
| | Three Months Ended
September 30, 2003
| | Three Months Ended
September 30, 2002
| |
|---|
(Dollars in millions)
| |
| |
| |
|---|
| Revenue: | | | | | | | |
| Total reportable segments | | $ | 23,272 | | $ | 21,533 | |
| Eliminations/other | | | (1,750 | ) | | (1,712 | ) |
| | |
| |
| |
| | Total IBM Consolidated | | $ | 21,522 | | $ | 19,821 | |
| | |
| |
| |
Pretax income: |
|
|
|
|
|
|
|
| Total reportable segments | | $ | 2,547 | | $ | 2,550 | |
| Eliminations /other | | | 2 | | | (146 | ) |
| | |
| |
| |
| | Total IBM Consolidated | | $ | 2,549 | | $ | 2,404 | |
| | |
| |
| |
SEGMENT INFORMATION—ON CONTINUING OPERATIONS BASIS
(UNAUDITED)
| |
| | Hardware Segments
| |
| |
| |
| |
| |
|---|
(Dollars in millions)
| | Global
Services
| | Systems
Group
| | Personal
Systems
Group
| | Technology
Group
| | Software
| | Global
Financing
| | Enterprise
Investments
| | Total
Segments
| |
|---|
| Nine Months Ended September 30, 2003: | | | | | | | | | | | | | | | | | | | | | | | | | |
| External revenue | | $ | 31,187 | | $ | 9,066 | | $ | 7,909 | | $ | 2,096 | | $ | 10,061 | | $ | 2,095 | | $ | 725 | | $ | 63,139 | |
| Internal revenue | | | 2,085 | | | 571 | | | 123 | | | 598 | | | 1,147 | | | 868 | | | 4 | | | 5,396 | |
| | |
| |
| |
| |
| |
| |
| |
| |
| |
| Total revenue | | $ | 33,272 | | $ | 9,637 | | $ | 8,032 | | $ | 2,694 | | $ | 11,208 | | $ | 2,963 | | $ | 729 | | $ | 68,535 | |
| | |
| |
| |
| |
| |
| |
| |
| |
| |
| Pre-tax income (loss) | | $ | 3,361 | | $ | 978 | | $ | (127 | ) | $ | (218 | ) | $ | 2,347 | | $ | 861 | | $ | (208 | ) | $ | 6,994 | |
| | |
| |
| |
| |
| |
| |
| |
| |
| |
| Revenue year-to-year change | | | 19.4 | % | | 7.4 | % | | (1.2 | )% | | (25.6 | )% | | 10.8 | % | | (1.0 | )% | | 4.6 | % | | 9.8 | % |
| Pre-tax income year-to-year change | | | 10.6 | % | | 32.2 | % | | nm | | | 80.2 | % | | 3.3 | % | | 27.2 | % | | (2.0 | )% | | 28.7 | % |
| Pre-tax income margin | | | 10.1 | % | | 10.1 | % | | (1.6 | )% | | (8.1 | )% | | 20.9 | % | | 29.1 | % | | (28.5 | )% | | 10.2 | % |
| Nine Months Ended September 30, 2002: | | | | | | | | | | | | | | | | | | | | | | | | | |
| External revenue | | $ | 25,785 | | $ | 8,446 | | $ | 8,047 | | $ | 2,972 | | $ | 9,2733 | | $ | 2,375 | | $ | 694 | | $ | 57,592 | |
| Internal revenue | | | 2,089 | | | 526 | | | 79 | | | 649 | | | 844 | | | 617 | | | 3 | | | 4,807 | |
| | |
| |
| |
| |
| |
| |
| |
| |
| |
| Total revenue | | $ | 27,874 | | $ | 8,972 | | $ | 8,126 | | $ | 3,621 | | $ | 10,117 | | $ | 2,992 | | $ | 697 | | $ | 62,399 | |
| | |
| |
| |
| |
| |
| |
| |
| |
| |
| Pre-tax income (loss) | | $ | 3,038 | | $ | 740 | | $ | 10 | | $ | (1,099 | ) | $ | 2,272 | | $ | 677 | | $ | (204 | ) | $ | 5,434 | |
| | |
| |
| |
| |
| |
| |
| |
| |
| |
| Pre-tax income margin | | | 10.9 | % | | 8.2 | % | | 0.1 | % | | (30.4 | )% | | 22.5 | % | | 22.6 | % | | (29.3 | )% | | 8.7 | % |
Reconciliations to IBM as Reported:
(Dollars in millions)
| | Nine Months Ended
September 30, 2003
| | Nine Months Ended
September 30, 2002
| |
|---|
| Revenue: | | | | | | | |
| Total reportable segments | | $ | 68,535 | | $ | 62,399 | |
| Eliminations/other | | | (5,317 | ) | | (4,897 | ) |
| | |
| |
| |
| | Total IBM Consolidated | | $ | 63,218 | | $ | 57,502 | |
| | |
| |
| |
| Pretax income: | | | | | | | |
| Total reportable segments | | $ | 6,994 | | $ | 5,434 | |
| Eliminations/other | | | 2 | | | (622 | ) |
| | |
| |
| |
| | Total IBM Consolidated | | $ | 6,996 | | $ | 4,812 | |
| | |
| |
| |
QuickLinks
COMPUTATION OF RATIO OF INCOME FROM CONTINUING OPERATIONS TO FIXED CHARGES (UNAUDITED)SEGMENT INFORMATION—ON CONTINUING OPERATIONS BASIS (UNAUDITED)SEGMENT INFORMATION—ON CONTINUING OPERATIONS BASIS (UNAUDITED)
