EXHIBIT 12
COMPUTATION OF RATIO OF INCOME FROM
CONTINUING OPERATIONS TO FIXED CHARGES
FOR THREE MONTHS ENDED MARCH 31,
(UNAUDITED)
(Dollars in millions) |
| 2005 |
| 2004* |
| ||
|
|
|
|
|
| ||
Income from continuing operations before income taxes (1) |
| $ | 2 ,010 |
| $ | 1,950 |
|
|
|
|
|
|
| ||
Add: Fixed charges, excluding capitalized interest |
| 291 |
| 260 |
| ||
|
|
|
|
|
| ||
Income as adjusted before income taxes |
| $ | 2,301 |
| $ | 2,210 |
|
|
|
|
|
|
| ||
Fixed charges: |
|
|
|
|
| ||
Interest expense |
| $ | 176 |
| $ | 143 |
|
Capitalized interest |
| 3 |
| — |
| ||
Portion of rental expense representative of interest |
| 115 |
| 117 |
| ||
|
|
|
|
|
| ||
Total fixed charges |
| $ | 294 |
| $ | 260 |
|
|
|
|
|
|
| ||
Ratio of income from continuing operations to fixed charges |
| 7.83 |
| 8.50 |
|
(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.
* Restated to include the impact of share-based compensation expense; see Note 3 on page 6 for additional information.
SEGMENT INFORMATION - ON CONTINUING OPERATIONS BASIS*
(UNAUDITED)
|
|
|
| Hardware Segments |
| |||||
(Dollars in millions) |
| Global |
| Systems and |
| Personal |
| |||
Quarter Ended March 31, 2005: |
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
| |||
External revenue |
| $ | 11,696 |
| $ | 3,869 |
| $ | 2,739 |
|
Internal revenue |
| 745 |
| 235 |
| 32 |
| |||
Total revenue |
| $ | 12,441 |
| $ | 4,104 |
| $ | 2,771 |
|
Pre-tax income (loss) |
| $ | 942 |
| $ | 109 |
| $ | (17 | ) |
|
|
|
|
|
|
|
| |||
Revenue year-to-year change |
| 5.6 | % | 2.3 | % | (2.7 | )% | |||
Pre-tax income year-to-year change |
| (4.9 | )% | (35.9 | )% | (54. 5 | )% | |||
Pre-tax income margin |
| 7.6 | % | 2.7 | % | (0.6 | )% | |||
|
|
|
|
|
|
|
| |||
Quarter Ended March 31, 2004: |
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
| |||
External revenue |
| $ | 11,024 |
| $ | 3,776 |
| $ | 2,826 |
|
Internal revenue |
| 762 |
| 236 |
| 23 |
| |||
Total revenue |
| $ | 11,786 |
| $ | 4,012 |
| $ | 2,849 |
|
Pre-tax income (loss) |
| $ | 991 |
| $ | 170 |
| $ | (11 | ) |
|
|
|
|
|
|
|
| |||
Pre-tax income margin |
| 8.4 | % | 4.2 | % | (0.4 | )% | |||
|
|
|
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|
|
|
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nm - not meaningful |
|
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|
Reconciliations to IBM as Reported:
(Dollars in millions) |
| Quarter Ended |
| Quarter Ended |
| ||
Revenue: |
|
|
|
|
| ||
Total reportable segments |
| $ | 24,650 |
| $ | 23,736 |
|
Eliminations/other |
| (1,742 | ) | (1,561 | ) | ||
Total IBM Consolidated |
| $ | 22,908 |
| $ | 22,175 |
|
|
|
|
|
|
| ||
Pretax income: |
|
|
|
|
| ||
Total reportable segments |
| $ | 2,291 |
| $ | 2,326 |
|
Incremental equity compensation expense |
| (246 | ) | (340 | ) | ||
Eliminations /other |
| (35 | ) | (36 | ) | ||
Total IBM Consolidated |
| $ | 2,010 |
| $ | 1,950 |
|
* Segment information for the quarters ending March 31, 2005 and March 31, 2004 does not include the impacts of the company’s implementation of SFAS 123(R), “Share-Based Payment” in the first quarter.
Software |
| Global |
| Enterprise |
| Total |
| ||||
|
|
|
|
|
|
|
| ||||
$ | 3,551 |
| $ | 579 |
| $ | 292 |
| $ | 22,726 |
|
461 |
| 449 |
| 2 |
| 1,924 |
| ||||
$ | 4,012 |
| $ | 1,028 |
| $ | 294 |
| $ | 24,650 |
|
$ | 893 |
| $ | 396 |
| $ | (32 | ) | $ | 2,291 |
|
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|
|
|
|
|
|
| ||||
3.7 | % | 8.8 | % | 6.1 | % | 3.9 | % | ||||
4.6 | % | 5.9 | % | 38.5 | % | (1.5 | )% | ||||
22.3 | % | 38.5 | % | (10.9 | )% | 9.3 | % | ||||
|
|
|
|
|
|
|
| ||||
$ | 3,466 |
| $ | 665 |
| $ | 275 |
| $ | 22,032 |
|
401 |
| 280 |
| 2 |
| 1,704 |
| ||||
$ | 3,867 |
| $ | 945 |
| $ | 277 |
| $ | 23,736 |
|
$ | 854 |
| $ | 374 |
| $ | (52 | ) | $ | 2, 326 |
|
|
|
|
|
|
|
|
| ||||
22.1 | % | 39.6 | % | (18.8 | )% | 9.8 | % |