EXHIBIT 12
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
FOR SIX MONTHS ENDED JUNE 30,
(UNAUDITED)
(Dollars in millions) |
| 2009 |
| 2008 |
| ||
Income before income taxes (1) |
| $ | 7,390 |
| $ | 7,015 |
|
|
|
|
|
|
| ||
Add: Fixed charges, excluding capitalized interest |
| 858 |
| 917 |
| ||
|
|
|
|
|
| ||
Income as adjusted before income taxes |
| $ | 8,248 |
| $ | 7,932 |
|
|
|
|
|
|
| ||
Fixed charges: |
|
|
|
|
| ||
Interest expense |
| $ | 611 |
| $ | 714 |
|
Capitalized interest |
| 6 |
| 8 |
| ||
Portion of rental expense representative of interest |
| 247 |
| 203 |
| ||
|
|
|
|
|
| ||
Total fixed charges |
| $ | 864 |
| $ | 925 |
|
|
|
|
|
|
| ||
Ratio of earnings to fixed charges |
| 9.55 |
| 8.58 |
|
(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
(UNAUDITED)
|
| Global Services |
|
|
|
|
|
|
|
|
| ||||||||
(Dollars in millions) |
| Global |
| Global |
| Software |
| Systems and |
| Global |
| Total |
| ||||||
For the Three Months Ended June 30, 2009: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
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|
|
|
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External revenue |
| $ | 9,108 |
| $ | 4,338 |
| $ | 5,166 |
| $ | 3,855 |
| $ | 568 |
| $ | 23,035 |
|
Internal revenue |
| 343 |
| 223 |
| 614 |
| 244 |
| 447 |
| 1,870 |
| ||||||
Total revenue |
| $ | 9,451 |
| $ | 4,562 |
| $ | 5,780 |
| $ | 4,098 |
| $ | 1,014 |
| $ | 24,905 |
|
Pre-tax income |
| $ | 1,405 |
| $ | 608 |
| $ | 1,852 |
| $ | 333 |
| $ | 465 |
| $ | 4,663 |
|
Revenue year-to-year change |
| (9.9 | )% | (15.0 | )% | (8.2 | )% | (24.5 | )% | (12.5 | )% | (13.3 | )% | ||||||
Pre-tax income year-to-year change |
| 41.3 | % | (4.5 | )% | 24.1 | % | (16.7 | )% | 8.6 | % | 18.0 | % | ||||||
Pre-tax income margin |
| 14.9 | % | 13.3 | % | 32.0 | % | 8.1 | % | 45.8 | % | 18.7 | % | ||||||
|
|
|
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|
|
|
|
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| ||||||
For the Three Months Ended June 30, 2008: |
|
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|
|
|
|
|
|
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|
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|
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|
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|
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| ||||||
External revenue |
| $ | 10,100 |
| $ | 5,107 |
| $ | 5,574 |
| $ | 5,212 |
| $ | 634 |
| $ | 26,626 |
|
Internal revenue |
| 390 |
| 259 |
| 719 |
| 215 |
| 525 |
| 2,108 |
| ||||||
Total revenue |
| $ | 10,489 |
| $ | 5,366 |
| $ | 6,293 |
| $ | 5,427 |
| $ | 1,159 |
| $ | 28,734 |
|
Pre-tax income |
| $ | 994 |
| $ | 637 |
| $ | 1,492 |
| $ | 400 |
| $ | 428 |
| $ | 3,951 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Pre-tax income margin |
| 9.5 | % | 11.9 | % | 23.7 | % | 7.4 | % | 36.9 | % | 13.8 | % |
Reconciliations to IBM as Reported:
(Dollars in millions) |
| Three Months Ended |
| Three Months Ended |
| ||
Revenue: |
|
|
|
|
| ||
Total reportable segments |
| $ | 24,905 |
| $ | 28,734 |
|
Eliminations/other |
| (1,655 | ) | (1,915 | ) | ||
Total IBM Consolidated |
| $ | 23,250 |
| $ | 26,820 |
|
|
|
|
|
|
| ||
Pre-tax income: |
|
|
|
|
| ||
Total reportable segments |
| $ | 4,663 |
| $ | 3,951 |
|
Eliminations/other |
| (401 | )* | (138 | )** | ||
Total IBM Consolidated |
| $ | 4,262 |
| $ | 3,814 |
|
* Includes a provision for losses related to a joint venture investment.
** 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.
70
SEGMENT INFORMATION
(UNAUDITED)
|
| Global Services |
|
|
|
|
|
|
|
|
| ||||||||
(Dollars in millions) |
| Global |
| Global |
| Software |
| Systems and |
| Global |
| Total |
| ||||||
For the Six Months Ended June 30, 2009: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
External revenue |
| $ | 17,862 |
| $ | 8,736 |
| $ | 9,705 |
| $ | 7,083 |
| $ | 1,146 |
| $ | 44,533 |
|
Internal revenue |
| 685 |
| 456 |
| 1,227 |
| 420 |
| 836 |
| 3,624 |
| ||||||
Total revenue |
| $ | 18,547 |
| $ | 9,191 |
| $ | 10,933 |
| $ | 7,503 |
| $ | 1,982 |
| $ | 48,156 |
|
Pre-tax income |
| $ | 2,509 |
| $ | 1,130 |
| $ | 3,186 |
| $ | 361 |
| $ | 825 |
| $ | 8,011 |
|
Revenue year-to-year change |
| (9.8 | )% | (12.8 | )% | (7.4 | )% | (23.8 | )% | (9.0 | )% | (12.3 | )% | ||||||
Pre-tax income year-to-year change |
| 26.6 | % | (7.1 | )% | 15.5 | % | (33.7 | )% | 1.1 | % | 9.5 | % | ||||||
Pre-tax income margin |
| 13.5 | % | 12.3 | % | 29.1 | % | 4.8 | % | 41.6 | % | 16.6 | % | ||||||
|
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| ||||||
For the Six Months Ended June 30, 2008: |
|
|
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|
|
|
|
|
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| ||||||
|
|
|
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|
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|
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|
|
|
| ||||||
External revenue |
| $ | 19,777 |
| $ | 10,018 |
| $ | 10,421 |
| $ | 9,431 |
| $ | 1,266 |
| $ | 50,913 |
|
Internal revenue |
| 778 |
| 517 |
| 1,386 |
| 410 |
| 911 |
| 4,002 |
| ||||||
Total revenue |
| $ | 20,555 |
| $ | 10,535 |
| $ | 11,807 |
| $ | 9,841 |
| $ | 2,177 |
| $ | 54,915 |
|
Pre-tax income |
| $ | 1,982 |
| $ | 1,216 |
| $ | 2,759 |
| $ | 546 |
| $ | 816 |
| $ | 7,319 |
|
|
|
|
|
|
|
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|
|
|
|
|
|
| ||||||
Pre-tax income margin |
| 9.6 | % | 11.5 | % | 23.4 | % | 5.5 | % | 37.5 | % | 13.3 | % |
Reconciliations to IBM as Reported:
(Dollars in millions) |
| Six Months Ended |
| Six Months Ended |
| ||
Revenue: |
|
|
|
|
| ||
Total reportable segments |
| $ | 48,156 |
| $ | 54,915 |
|
Eliminations/other |
| (3,195 | ) | (3,593 | ) | ||
Total IBM Consolidated |
| $ | 44,962 |
| $ | 51,322 |
|
|
|
|
|
|
| ||
Pre-tax income: |
|
|
|
|
| ||
Total reportable segments |
| $ | 8,011 |
| $ | 7,319 |
|
Eliminations/other |
| (627 | )* | (307 | )** | ||
Total IBM Consolidated |
| $ | 7,385 |
| $ | 7,012 |
|
* Includes a provision for losses related to a joint venture investment.
** 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.
71