EXHIBIT 12
COMPUTATION OF RATIO OF INCOME FROM
CONTINUING OPERATIONS TO FIXED CHARGES
FOR SIX MONTHS ENDED JUNE 30,
(UNAUDITED)
(Dollars in millions) |
| 2008 |
| 2007 |
| ||
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|
| ||
Income from continuing operations before income taxes (1) |
| $ | 7,015 |
| $ | 5,725 |
|
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|
|
|
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Add: Fixed charges, excluding capitalized interest |
| 917 |
| 814 |
| ||
|
|
|
|
|
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Income as adjusted before income taxes |
| $ | 7,932 |
| $ | 6,539 |
|
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|
|
| ||
Fixed charges: |
|
|
|
|
| ||
Interest expense |
| $ | 714 |
| $ | 597 |
|
Capitalized interest |
| 8 |
| 3 |
| ||
Portion of rental expense representative of interest |
| 203 |
| 217 |
| ||
|
|
|
|
|
| ||
Total fixed charges |
| $ | 925 |
| $ | 817 |
|
|
|
|
|
|
| ||
Ratio of income from continuing operations to fixed charges |
| 8.58 |
| 8.00 |
|
(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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62
SEGMENT INFORMATION - ON CONTINUING OPERATIONS BASIS
(UNAUDITED)
|
| Global Services |
|
|
|
|
|
|
|
|
| ||
|
| Global |
| Global |
|
|
|
|
|
|
|
|
|
|
| Technology |
| Business |
| Systems and |
|
|
| Global |
| Total |
|
(Dollars in millions) |
| Services |
| Services |
| Technology |
| Software |
| Financing |
| Segments |
|
Three Months Ended June 30, 2008: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External revenue |
| $10,100 |
| $5,107 |
| $5,212 |
| $5,574 |
| $634 |
| $26,626 |
|
Internal revenue |
| 390 |
| 259 |
| 215 |
| 719 |
| 525 |
| 2,108 |
|
Total revenue |
| $10,489 |
| $5,366 |
| $5,427 |
| $6,293 |
| $1,159 |
| $28,734 |
|
Pre-tax income |
| $994 |
| $637 |
| $400 |
| $1,492 |
| $428 |
| $3,951 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue year-to-year change |
| 14.5 | % | 15.0 | % | 1.3 | % | 18.2 | % | 23.5 | % | 12.9 | % |
Pre-tax income year-to-year change |
| 26.2 | % | 31.2 | % | 20.7 | % | 19.4 | % | 28.7 | % | 24.0 | % |
Pre-tax income margin |
| 9.5 | % | 11.9 | % | 7.4 | % | 23.7 | % | 36.9 | % | 13.8 | % |
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|
Three Months Ended June 30, 2007: |
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax income margin |
| 8.6 | % | 10.4 | % | 6.2 | % | 23.5 | % | 35.4 | % | 12.5 | % |
Reconciliations to IBM as Reported:
|
| Three Months Ended |
| Three Months Ended |
| ||
(Dollars in millions) |
| June 30, 2008 |
| June 30, 2007 |
| ||
Revenue: |
|
|
|
|
| ||
Total reportable segments |
| $ | 28,734 |
| $ | 25,453 |
|
Eliminations/other |
| (1,915 | ) | (1,681 | ) | ||
Total IBM Consolidated |
| $ | 26,820 |
| $ | 23,772 |
|
|
|
|
|
|
| ||
Pre-tax income: |
|
|
|
|
| ||
Total reportable segments |
| $ | 3,951 |
| $ | 3,187 |
|
Eliminations/other |
| (138 | )* | (46 | )* | ||
Total IBM Consolidated |
| $ | 3,814 |
| $ | 3,142 |
|
* 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.
63
SEGMENT INFORMATION - ON CONTINUING OPERATIONS BASIS
(UNAUDITED)
|
| Global Services |
|
|
|
|
|
|
|
|
| ||||||||
|
| Global |
| Global |
|
|
|
|
|
|
|
|
| ||||||
|
| Technology |
| Business |
| Systems and |
|
|
| Global |
| Total |
| ||||||
(Dollars in millions) |
| Services |
| Services |
| Technology |
| Software |
| Financing |
| Segments |
| ||||||
Six Months Ended June 30, 2008: |
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External revenue |
| $ | 19,777 |
| $ | 10,018 |
| $ | 9,431 |
| $ | 10,421 |
| $ | 1,266 |
| $ | 50,913 |
|
Internal revenue |
| 778 |
| 517 |
| 410 |
| 1,386 |
| 911 |
| 4,002 |
| ||||||
Total revenue |
| $ | 20,555 |
| $ | 10,535 |
| $ | 9,841 |
| $ | 11,807 |
| $ | 2,177 |
| $ | 54,915 |
|
Pre-tax income |
| $ | 1,982 |
| $ | 1,216 |
| $ | 546 |
| $ | 2,759 |
| $ | 816 |
| $ | 7,319 |
|
|
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| ||||||
Revenue year-to-year change |
| 15.2 | % | 15.1 | % | (3.0 | )% | 16.2 | % | 14.5 | % | 11.6 | % | ||||||
Pre-tax income year-to-year change |
| 34.9 | % | 27.3 | % | 27.5 | % | 20.7 | % | 15.6 | % | 25.2 | % | ||||||
Pre-tax income margin |
| 9.6 | % | 11.5 | % | 5.5 | % | 23.4 | % | 37.5 | % | 13.3 | % | ||||||
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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 |
|
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|
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| ||||||
Pre-tax income margin |
| 8.2 | % | 10.4 | % | 4.2 | % | 22.5 | % | 37.1 | % | 11.9 | % |
Reconciliations to IBM as Reported:
|
| Six Months Ended |
| Six Months Ended |
| ||
(Dollars in millions) |
| June 30, 2008 |
| June 30, 2007 |
| ||
Revenue: |
|
|
|
|
| ||
Total reportable segments |
| $ | 54,915 |
| $ | 49,207 |
|
Eliminations/other |
| (3,593 | ) | (3,406 | ) | ||
Total IBM Consolidated |
| $ | 51,322 |
| $ | 45,801 |
|
|
|
|
|
|
| ||
Pre-tax income: |
|
|
|
|
| ||
Total reportable segments |
| $ | 7,319 |
| $ | 5,844 |
|
Eliminations/other |
| (307 | )* | (124 | )* | ||
Total IBM Consolidated |
| $ | 7,012 |
| $ | 5,721 |
|
* 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.
64