EXHIBIT 12
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
FOR THREE MONTHS ENDED MARCH 31,
(UNAUDITED)
(Dollars in millions) |
| 2009 |
| 2008 |
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Income before income taxes (1) |
| $ | 3,123 |
| $ | 3,194 |
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|
|
|
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Add: Fixed charges, excluding capitalized interest |
| 455 |
| 486 |
| ||
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|
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Income as adjusted before income taxes |
| $ | 3,578 |
| $ | 3,680 |
|
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Fixed charges: |
|
|
|
|
| ||
Interest expense |
| $ | 332 |
| $ | 384 |
|
Capitalized interest |
| 3 |
| 3 |
| ||
Portion of rental expense representative of interest |
| 123 |
| 102 |
| ||
|
|
|
|
|
| ||
Total fixed charges |
| $ | 458 |
| $ | 489 |
|
|
|
|
|
|
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Ratio of earnings to fixed charges |
| 7.81 |
| 7.53 |
|
(1) Income 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.
51
SEGMENT INFORMATION
(UNAUDITED)
|
| Global Services |
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| Global |
| Global |
|
|
| Systems |
| Global |
| Total |
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(Dollars in millions) |
| Services |
| Services |
| Software |
| Technology |
| Financing |
| Segments |
| ||||||
For the Three Months Ended March 31, 2009: |
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|
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|
|
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External revenue |
| $ | 8,754 |
| $ | 4,397 |
| $ | 4,539 |
| $ | 3,228 |
| $ | 578 |
| $ | 21,498 |
|
Internal revenue |
| 342 |
| 232 |
| 614 |
| 176 |
| 390 |
| 1,754 |
| ||||||
Total revenue |
| $ | 9,096 |
| $ | 4,629 |
| $ | 5,153 |
| $ | 3,404 |
| $ | 968 |
| $ | 23,251 |
|
Pre-tax income |
| $ | 1,104 |
| $ | 521 |
| $ | 1,335 |
| $ | 28 |
| $ | 360 |
| $ | 3,348 |
|
Revenue year-to-year change |
| (9.6 | )% | (10.4 | )% | (6.5 | )% | (22.9 | )% | (5.0 | )% | (11.2 | )% | ||||||
Pre-tax income year-to-year change |
| 11.7 | % | (10.0 | )% | 5.4 | % | (80.7 | )% | (7.2 | )% | (0.6 | )% | ||||||
Pre-tax income margin |
| 12.1 | % | 11.3 | % | 25.9 | % | 0.8 | % | 37.2 | % | 14.4 | % | ||||||
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For the Three Months Ended March 31, 2008: |
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External revenue |
| $ | 9,677 |
| $ | 4,911 |
| $ | 4,847 |
| $ | 4,219 |
| $ | 633 |
| $ | 24,286 |
|
Internal revenue |
| 388 |
| 258 |
| 667 |
| 195 |
| 386 |
| 1,894 |
| ||||||
Total revenue |
| $ | 10,065 |
| $ | 5,169 |
| $ | 5,514 |
| $ | 4,414 |
| $ | 1,019 |
| $ | 26,180 |
|
Pre-tax income |
| $ | 988 |
| $ | 579 |
| $ | 1,267 |
| $ | 145 |
| $ | 388 |
| $ | 3,368 |
|
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Pre-tax income margin |
| 9.8 | % | 11.2 | % | 23.0 | % | 3.3 | % | 38.1 | % | 12.9 | % |
Reconciliations to IBM as Reported:
|
| For the Three |
| For the Three |
| ||
(Dollars in millions) |
| March 31, 2009 |
| March 31, 2008 |
| ||
Revenue: |
|
|
|
|
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Total reportable segments |
| $ | 23,251 |
| $ | 26,180 |
|
Eliminations/other |
| (1,540 | ) | (1,679 | ) | ||
Total IBM Consolidated |
| $ | 21,711 |
| $ | 24,502 |
|
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Pre-tax income: |
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|
|
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Total reportable segments |
| $ | 3,348 |
| $ | 3,368 |
|
Eliminations/other |
| (226 | ) | (170 | ) | ||
Total IBM Consolidated |
| $ | 3,122 |
| $ | 3,198 |
|
52