International Business Machines (IBM) 10-Q 2011 Q2 Quarterly report

EXHIBIT 12

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

FOR SIX MONTHS ENDED JUNE 30,

(UNAUDITED)

(Dollars in millions)	2011		2010
Income before income taxes (1)	$	8,719	$	8,103
Add: Fixed charges, excluding capitalized interest	720		712
Income as adjusted before income taxes	$	9,439	$	8,815
Fixed charges:
Interest expense	$	469	$	461
Capitalized interest	6		4
Portion of rental expense representative of interest	251		251
Total fixed charges	$	726	$	716
Ratio of earnings to fixed charges	13.00		12.31

(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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