EXHIBIT 12
COMPUTATION OF RATIO OF INCOME FROM
CONTINUING OPERATIONS TO FIXED CHARGES
FOR SIX MONTHS ENDED JUNE 30,
(UNAUDITED)
(Dollars in millions) |
| 2007 |
| 2006 |
| ||
|
|
|
|
|
| ||
Income from continuing operations before income taxes (1) |
| $ | 5,725 |
| $ | 5,330 |
|
|
|
|
|
|
| ||
Add: Fixed charges, excluding capitalized interest |
| 814 |
| 675 |
| ||
|
|
|
|
|
| ||
Income as adjusted before income taxes |
| $ | 6,539 |
| $ | 6,005 |
|
|
|
|
|
|
| ||
Fixed charges: |
|
|
|
|
| ||
Interest expense |
| $ | 597 |
| $ | 453 |
|
Capitalized interest |
| 3 |
| 6 |
| ||
Portion of rental expense representative of interest |
| 217 |
| 222 |
| ||
|
|
|
|
|
| ||
Total fixed charges |
| $ | 817 |
| $ | 681 |
|
|
|
|
|
|
| ||
Ratio of income from continuing operations to fixed charges |
| 8.00 |
| 8.82 |
|
(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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SEGMENT INFORMATION - ON CONTINUING OPERATIONS BASIS
(UNAUDITED)
|
| Global Services |
|
|
|
|
|
|
|
|
| ||||||||
(Dollars in millions) |
| Global |
| Global |
| Systems and |
| Software |
| Global |
| Total |
| ||||||
Three Months Ended June 30, 2007: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
External revenue |
| $ | 8,756 |
| $ | 4,338 |
| $ | 5,102 |
| $ | 4,777 |
| $ | 597 |
| $ | 23,571 |
|
Internal revenue |
| 409 |
| 329 |
| 255 |
| 549 |
| 341 |
| 1,883 |
| ||||||
Total revenue |
| $ | 9,165 |
| $ | 4,667 |
| $ | 5,357 |
| $ | 5,326 |
| $ | 938 |
| $ | 25,453 |
|
Pre-tax income |
| $ | 788 |
| $ | 486 |
| $ | 332 |
| $ | 1,250 |
| $ | 332 |
| $ | 3,187 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Revenue year-to-year change |
| 9.1 | % | 8.8 | % | 1.4 | % | 11.3 | % | 2.6 | % | 7.5 | % | ||||||
Pre-tax income year-to-year change |
| 0.1 | % | 19.2 | % | 77.0 | % | 8.2 | % | 4.2 | % | 11.6 | % | ||||||
Pre-tax income margin |
| 8.6 | % | 10.4 | % | 6.2 | % | 23.5 | % | 35.4 | % | 12.5 | % | ||||||
|
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| ||||||
Three Months Ended June 30, 2006: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
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| ||||||
External revenue |
| $ | 7,955 |
| $ | 3,939 |
| $ | 5,014 |
| $ | 4,241 |
| $ | 576 |
| $ | 21,725 |
|
Internal revenue |
| 449 |
| 351 |
| 271 |
| 543 |
| 338 |
| 1,952 |
| ||||||
Total revenue |
| $ | 8,404 |
| $ | 4,290 |
| $ | 5,286 |
| $ | 4,784 |
| $ | 914 |
| $ | 23,677 |
|
Pre-tax income |
| $ | 787 |
| $ | 407 |
| $ | 187 |
| $ | 1,156 |
| $ | 319 |
| $ | 2,856 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Pre-tax income margin |
| 9.4 | % | 9.5 | % | 3.5 | % | 24.2 | % | 34.9 | % | 12.1 | % |
Reconciliations to IBM as Reported:
(Dollars in millions) |
| Three Months Ended |
| Three Months Ended |
| ||
Revenue: |
|
|
|
|
| ||
Total reportable segments |
| $ | 25,453 |
| $ | 23,677 |
|
Eliminations/other |
| (1,681 | ) | (1,787 | ) | ||
Total IBM Consolidated |
| $ | 23,772 |
| $ | 21,890 |
|
|
|
|
|
|
| ||
Pre-tax income: |
|
|
|
|
| ||
Total reportable segments |
| $ | 3,187 |
| $ | 2,856 |
|
Eliminations/other |
| (46 | )* | 32 |
| ||
Total IBM Consolidated |
| $ | 3,142 |
| $ | 2,889 |
|
* | Includes the gain from the divestiture of the company’s printing business and the interest expense associated with the debt to support the company’s accelerated share repurchase. |
61
SEGMENT INFORMATION - ON CONTINUING OPERATIONS BASIS
(UNAUDITED)
|
| Global Services |
|
|
|
|
|
|
|
|
| ||||||||
(Dollars in millions) |
| Global |
| Global |
| Systems and |
| Software |
| Global |
| Total |
| ||||||
Six Months Ended June 30, 2007: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
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| ||||||
External revenue |
| $ | 17,013 |
| $ | 8,521 |
| $ | 9,622 |
| $ | 9,028 |
| $ | 1,211 |
| $ | 45,397 |
|
Internal revenue |
| 834 |
| 630 |
| 523 |
| 1,134 |
| 689 |
| 3,810 |
| ||||||
Total revenue |
| $ | 17,848 |
| $ | 9,152 |
| $ | 10,145 |
| $ | 10,162 |
| $ | 1,901 |
| $ | 49,207 |
|
Pre-tax income |
| $ | 1,469 |
| $ | 955 |
| $ | 428 |
| $ | 2,286 |
| $ | 706 |
| $ | 5,844 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Revenue year-to-year change |
| 7.7 | % | 8.0 | % | 1.6 | % | 10.4 | % | 2.2 | % | 6.7 | % | ||||||
Pre-tax income year-to-year change |
| (10.0 | )% | 25.2 | % | 153.0 | % | 5.0 | % | (3.7 | )% | 6.8 | % | ||||||
Pre-tax income margin |
| 8.2 | % | 10.4 | % | 4.2 | % | 22.5 | % | 37.1 | % | 11.9 | % | ||||||
|
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Six Months Ended June 30, 2006: |
|
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|
|
|
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|
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|
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External revenue |
| $ | 15,674 |
| $ | 7,787 |
| $ | 9,433 |
| $ | 8,147 |
| $ | 1,158 |
| $ | 42,200 |
|
Internal revenue |
| 900 |
| 687 |
| 552 |
| 1,057 |
| 702 |
| 3,898 |
| ||||||
Total revenue |
| $ | 16,575 |
| $ | 8,474 |
| $ | 9,985 |
| $ | 9,205 |
| $ | 1,860 |
| $ | 46,098 |
|
Pre-tax income |
| $ | 1,631 |
| $ | 763 |
| $ | 169 |
| $ | 2,177 |
| $ | 733 |
| $ | 5,473 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Pre-tax income margin |
| 9.8 | % | 9.0 | % | 1.7 | % | 23.6 | % | 39.4 | % | 11.9 | % |
Reconciliations to IBM as Reported:
(Dollars in millions) |
| Six Months Ended |
| Six MonthsEnded |
| ||
Revenue: |
|
|
|
|
| ||
Total reportable segments |
| $ | 49,207 |
| $ | 46,098 |
|
Eliminations/other |
| (3,406 | ) | (3,549 | ) | ||
Total IBM Consolidated |
| $ | 45,801 |
| $ | 42,549 |
|
|
|
|
|
|
| ||
Pre-tax income: |
|
|
|
|
| ||
Total reportable segments |
| $ | 5,844 |
| $ | 5,473 |
|
Eliminations/other |
| (124 | )* | (145 | ) | ||
Total IBM Consolidated |
| $ | 5,721 |
| $ | 5,328 |
|
* | Includes the gain from the divestiture of the company’s printing business and the interest expense associated with the debt to support the company’s accelerated share repurchase. |
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