International Business Machines (IBM) 10-Q 2010 Q3 Quarterly report

EXHIBIT 12

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

FOR NINE MONTHS ENDED SEPTEMBER 30,

(UNAUDITED)

(Dollars in millions)	2010		2009
Income before income taxes (1)	$	12,777	$	11,775
Add: Fixed charges, excluding capitalized interest	1,064		1,238
Income as adjusted before income taxes	$	13,841	$	13,013
Fixed charges:
Interest expense	$	688	$	868
Capitalized interest	5		9
Portion of rental expense representative of interest	376		370
Total fixed charges	$	1,069	$	1,247
Ratio of earnings to fixed charges	12.95		10.44

(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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