EXHIBIT 12
COMPUTATION OF RATIO OF INCOME FROM
CONTINUING OPERATIONS TO FIXED CHARGES
FOR NINE MONTHS ENDED SEPTEMBER 30,
(UNAUDITED)
(Dollars in millions)
|
| 2004 |
| 2003 |
| ||
|
|
|
|
|
| ||
Income from continuing operations before income taxes (1) |
| $ | 7,600 |
| $ | 6,989 |
|
|
|
|
|
|
| ||
Add: Fixed charges, excluding capitalized interest |
| 767 |
| 843 |
| ||
|
|
|
|
|
| ||
Income as adjusted before income taxes |
| $ | 8,367 |
| $ | 7,832 |
|
|
|
|
|
|
| ||
Fixed charges: |
|
|
|
|
| ||
Interest expense |
| $ | 417 |
| $ | 501 |
|
Capitalized interest |
| 8 |
| 11 |
| ||
Portion of rental expense representative of interest |
| 350 |
| 342 |
| ||
|
|
|
|
|
| ||
Total fixed charges |
| $ | 775 |
| $ | 854 |
|
Ratio of income from continuing operations to fixed charges |
| 10.80 |
| 9.17 |
|
(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.
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64
SEGMENT INFORMATION - ON CONTINUING OPERATIONS BASIS
(UNAUDITED)
|
|
|
| Hardware Segments |
| |||||
(Dollars in millions) |
| Global |
| Systems and |
| Personal |
| |||
Three Months Ended September 30, 2004: |
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
| |||
External revenue |
| $ | 11,392 |
| $ | 4,117 |
| $ | 3,261 |
|
Internal revenue |
| 791 |
| 265 |
| 52 |
| |||
Total revenue |
| $ | 12,183 |
| $ | 4,382 |
| $ | 3,313 |
|
Pre-tax income (loss) |
| $ | 1,157 |
| $ | 417 |
| $ | 54 |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue year-to-year change |
| 10.0 | % | 9.7 | % | 16.7 | % | |||
Pre-tax income year-to-year change |
| (4.4 | )% | 32.4 | % | nm | % | |||
Pre-tax income margin |
| 9.5 | % | 9.5 | % | 1.6 | % | |||
|
|
|
|
|
|
|
| |||
Three Months Ended September 30, 2003: |
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
| |||
External revenue |
| $ | 10,383 |
| $ | 3,781 |
| $ | 2,796 |
|
Internal revenue |
| 691 |
| 213 |
| 43 |
| |||
Total revenue |
| $ | 11,074 |
| $ | 3,994 |
| $ | 2,839 |
|
Pre-tax income (loss) |
| $ | 1,210 |
| $ | 315 |
| $ | (50 | ) |
|
|
|
|
|
|
|
| |||
Pre-tax income margin |
| 10.9 | % | 7.9 | % | (1.8 | )% |
Reconciliations to IBM as Reported:
|
| Three Months Ended |
| Three Months Ended |
| ||
(Dollars in millions) |
|
|
|
|
| ||
Revenue: |
|
|
|
|
| ||
Total reportable segments |
| $ | 25,134 |
| $ | 22,976 |
|
Eliminations/other |
| (1,705 | ) | (1,454 | ) | ||
Total IBM Consolidated |
| $ | 23,429 |
| $ | 21,522 |
|
|
|
|
|
|
|
|
|
Pretax income: |
|
|
|
|
| ||
Total reportable segments |
| $ | 2,935 |
| $ | 2,571 |
|
Eliminations/other |
| (404 | ) | (22 | ) | ||
Total IBM Consolidated |
| $ | 2,531 |
| $ | 2,549 |
|
65
(Dollars in millions) |
| Software |
| Global |
| Enterprise |
| Total |
| ||||
Three Months Ended September 30, 2004: |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
| ||||
External revenue |
| $ | 3,621 |
| $ | 634 |
| $ | 257 |
| $ | 23,282 |
|
Internal revenue |
| 433 |
| 309 |
| 2 |
| 1,852 |
| ||||
Total revenue |
| $ | 4,054 |
| $ | 943 |
| $ | 259 |
| $ | 25,134 |
|
Pre-tax income (loss) |
| $ | 1,011 |
| $ | 351 |
| $ | (55 | ) | $ | 2,935 |
|
|
|
|
|
|
|
|
|
|
| ||||
Revenue year-to-year change |
| 5.8 | % | (3.7 | )% | 0.0 | % | 9.4 |
| ||||
Pre-tax income year-to-year change |
| 17.8 | % | 20.2 | % | (1.9. | )% | 14.2 | % | ||||
Pre-tax income margin |
| 24.9 | % | 37.2 | % | (21.2 | )% | 11.7 | % | ||||
|
|
|
|
|
|
|
|
|
| ||||
Three Months Ended September 30, 2003: |
|
|
|
|
|
|
|
|
| ||||
External revenue |
| $ | 3,461 |
| $ | 713 |
| $ | 257 |
| $ | 21,391 |
|
Internal revenue |
| 370 |
| 266 |
| 2 |
| 1,585 |
| ||||
Total revenue |
| $ | 3,831 |
| $ | 979 |
| $ | 259 |
| $ | 22,976 |
|
Pre-tax income (loss) |
| $ | 858 |
| $ | 292 |
| $ | (54 | ) | $ | 2,571 |
|
|
|
|
|
|
|
|
|
|
| ||||
Pre-tax income margin |
| 22.4 | % | 29.8 | % | (20.8 | )% | 11.2 | % |
66
SEGMENT INFORMATION - ON CONTINUING OPERATIONS BASIS
(UNAUDITED)
|
|
|
| Hardware Segments |
| |||||
(Dollars in millions) |
| Global |
| Systems and |
| Personal |
| |||
Nine Months Ended September 30, 2004: |
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
| |||
External revenue |
| $ | 33,818 |
| $ | 12,047 |
| $ | 9,252 |
|
Internal revenue |
| 2,312 |
| 777 |
| 115 |
| |||
Total revenue |
| $ | 36,130 |
| $ | 12,824 |
| $ | 9,367 |
|
Pre-tax income (loss) |
| $ | 3,237 |
| $ | 1,190 |
| $ | 70 |
|
|
|
|
|
|
|
|
| |||
Revenue year-to-year change |
| 8.6 | % | 11.9 | % | 16.6 | % | |||
Pre-tax income year-to-year change |
| (3.7 | )% | 62.1 | % | nm | % | |||
Pre-tax income margin |
| 9.0 | % | 9.3 | % | 0.7 | % | |||
|
|
|
|
|
|
|
| |||
Nine Months Ended September 30, 2003: |
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
| |||
External revenue |
| $ | 31,187 |
| $ | 10,875 |
| $ | 7,909 |
|
Internal revenue |
| 2,085 |
| 590 |
| 123 |
| |||
Total revenue |
| $ | 33,272 |
| $ | 11,465 |
| $ | 8,032 |
|
Pre-tax income (loss) |
| $ | 3,361 |
| $ | 734 |
| $ | (127 | ) |
|
|
|
|
|
|
|
| |||
Pre-tax income margin |
| 10.1 | % | 6.4 | % | (1.6% | ) |
Reconciliations to IBM as Reported:
(Dollars in millions) |
| Nine Months Ended |
| Nine Months Ended |
| ||
Revenue: |
|
|
|
|
| ||
Total reportable segments |
| $ | 73,790 |
| $ | 67,669 |
|
Eliminations/other |
| (4,958 | ) | (4,451 | ) | ||
Total IBM Consolidated |
| $ | 68,832 |
| $ | 63,218 |
|
|
|
|
|
|
| ||
Pretax income: |
|
|
|
|
| ||
Total reportable segments |
| $ | 8,240 |
| $ | 6,968 |
|
Eliminations/other |
| (576 | ) | 28 |
| ||
Total IBM Consolidated |
| $ | 7,664 |
| $ | 6,996 |
|
67
(Dollars in millions) |
| Software |
| Global |
| Enterprise |
| Total |
| ||||
Nine Months Ended September 30, 2004: |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
| ||||
External revenue |
| $ | 10,545 |
| $ | 1,951 |
| $ | 801 |
| $ | 68,414 |
|
Internal revenue |
| 1,291 |
| 875 |
| 6 |
| 5,376 |
| ||||
Total revenue |
| $ | 11,836 |
| $ | 2,826 |
| $ | 807 |
| $ | 73,790 |
|
Pre-tax income (loss) |
| $ | 2,823 |
| $ | 1,073 |
| $ | (153 | ) | $ | 8,240 |
|
|
|
|
|
|
|
|
|
|
| ||||
Revenue year-to-year change |
| 5.6 | % | (4.6 | )% | 10.7 | % | 9.0 | % | ||||
Pre-tax income year-to-year change |
| 20.3 | % | 24.6 | % | 26.4 | % | 18.3 | % | ||||
Pre-tax income margin |
| 23.9 | % | 38.0 | % | (19.0 | )% | 11.2 | % | ||||
|
|
|
|
|
|
|
|
|
| ||||
Nine Months Ended September 30, 2003: |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
| ||||
External revenue |
| $ | 10,061 |
| $ | 2,095 |
| $ | 725 |
| $ | 62,852 |
|
Internal revenue |
| 1,147 |
| 868 |
| 4 |
| 4,817 |
| ||||
Total revenue |
| $ | 11,208 |
| $ | 2,963 |
| $ | 729 |
| $ | 67,669 |
|
Pre-tax income (loss) |
| $ | 2,347 |
| $ | 861 |
| $ | (208 | ) | $ | 6,968 |
|
|
|
|
|
|
|
|
|
|
| ||||
Pre-tax income margin |
| 20.9 | % | 29.1 | % | (28.5 | )% | 10.3 | % |
68