EXHIBIT 12
COMPUTATION OF RATIO OF INCOME FROM
CONTINUING OPERATIONS TO FIXED CHARGES
FOR THREE MONTHS ENDED MARCH 31,
(UNAUDITED)
(Dollars in millions) |
| 2007 |
| 2006 |
| ||
|
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Income from continuing operations before income taxes (1) |
| $ | 2,581 |
| $ | 2,442 |
|
|
|
|
|
|
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Add: Fixed charges, excluding capitalized interest |
| 370 |
| 330 |
| ||
|
|
|
|
|
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Income as adjusted before income taxes |
| $ | 2,951 |
| $ | 2,772 |
|
|
|
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|
|
| ||
Fixed charges: |
|
|
|
|
| ||
Interest expense |
| $ | 261 |
| $ | 220 |
|
Capitalized interest |
| 8 |
| 5 |
| ||
Portion of rental expense representative of interest |
| 109 |
| 111 |
| ||
|
|
|
|
|
| ||
Total fixed charges |
| $ | 378 |
| $ | 335 |
|
|
|
|
|
|
| ||
Ratio of income from continuing operations to fixed charges |
| 7.81 |
| 8.27 |
|
(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.
42
SEGMENT INFORMATION — ON CONTINUING OPERATIONS BASIS
(UNAUDITED)
|
| Global Services |
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|
| Global |
| Global |
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|
| Technology |
| Business |
| Systems and |
|
|
| Global |
| Total |
| ||||||
(Dollars in millions) |
| Services |
| Services |
| Technology |
| Software |
| Financing |
| Segments |
| ||||||
Quarter Ended March 31, 2007: |
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External revenue |
| $ | 8,258 |
| $ | 4,183 |
| $ | 4,520 |
| $ | 4,251 |
| $ | 614 |
| $ | 21,826 |
|
Internal revenue |
| 425 |
| 301 |
| 267 |
| 585 |
| 349 |
| 1,927 |
| ||||||
Total revenue |
| $ | 8,683 |
| $ | 4,485 |
| $ | 4,787 |
| $ | 4,836 |
| $ | 963 |
| $ | 23,753 |
|
Pre-tax income (loss) |
| $ | 681 |
| $ | 470 |
| $ | 96 |
| $ | 1,036 |
| $ | 374 |
| $ | 2,657 |
|
|
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| ||||||
Revenue year-to-year change |
| 6.3 | % | 7.2 | % | 1.9 | % | 9.4 | % | 1.8 | % | 5.9 | % | ||||||
Pre-tax income year-to-year change |
| (19.3 | )% | 32.1 | % | nm |
| 1.5 | % | (9.7 | )% | 1.5 | % | ||||||
Pre-tax income margin |
| 7.8 | % | 10.5 | % | 2.0 | % | 21.4 | % | 38.8 | % | 11.2 | % | ||||||
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Quarter Ended March 31, 2006: |
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External revenue |
| $ | 7,719 |
| $ | 3,848 |
| $ | 4,419 |
| $ | 3,907 |
| $ | 582 |
| $ | 20,475 |
|
Internal revenue |
| 451 |
| 336 |
| 280 |
| 514 |
| 364 |
| 1,946 |
| ||||||
Total revenue |
| $ | 8,171 |
| $ | 4,184 |
| $ | 4,699 |
| $ | 4,421 |
| $ | 946 |
| $ | 22,421 |
|
Pre-tax income (loss) |
| $ | 844 |
| $ | 356 |
| $ | (18 | ) | $ | 1,021 |
| $ | 414 |
| $ | 2,616 |
|
|
|
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Pre-tax income margin |
| 10.3 | % | 8.5 | % | (0.4 | )% | 23.1 | % | 43.8 | % | 11.7 | % |
nm - not meaningful
Reconciliations to IBM as Reported:
|
| Quarter Ended |
| Quarter Ended |
| ||
(Dollars in millions) |
| March 31, 2007 |
| March 31, 2006 |
| ||
Revenue: |
|
|
|
|
| ||
Total reportable segments |
| $ | 23,753 |
| $ | 22,421 |
|
Eliminations/other |
| (1,724 | ) | (1,762 | ) | ||
Total IBM Consolidated |
| $ | 22,029 |
| $ | 20,659 |
|
|
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Pre-tax income: |
|
|
|
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Total reportable segments |
| $ | 2,657 |
| $ | 2,616 |
|
Eliminations/other |
| (78 | ) | (177 | ) | ||
Total IBM Consolidated |
| $ | 2,579 |
| $ | 2,440 |
|
43