EX-12 3 0003.txt STATEMENT RE: COMPUTATION OF RATIOS EXHIBIT 12 COMPUTATION OF RATIO OF NET INCOME TO FIXED CHARGES AND NET INCOME TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS FOR NINE MONTHS ENDED SEPTEMBER 30 (UNAUDITED) (Dollars in millions) 2000 1999 ---- ---- Income before income taxes (1) $ 7,711 $ 8,697 Add: Fixed charges, excluding capitalized interest 1,379 1,448 ------- ------- Income as adjusted before income taxes $ 9,090 $10,145 ======= ======= Fixed charges: Interest expense $ 1,050 $ 1,098 Capitalized interest 23 23 Portion of rental expense representative of interest 329 350 ------- ------- Total fixed charges $ 1,402 $ 1,471 ======= ======= Preferred stock dividends (2) 21 23 ------- ------- Combined fixed charges and preferred stock dividends $ 1,423 $ 1,494 ======= ======= Ratio of net income to fixed charges 6.48 6.90 Ratio of net income to combined fixed charges and preferred stock dividends 6.39 6.79 (1) Income before income taxes excludes the company's share in the income and losses of less-than-fifty percent-owned affiliates. (2) Included in the ratio computation are preferred stock dividends of $15 million for the first nine months of 2000 and 1999, or $21 million and $23 million, respectively, representing the pre-tax income that would be required to cover those dividend requirements based on the company's effective tax rate for the nine months ended September 30, 2000 and 1999. - 24 - SEGMENT INFORMATION (UNAUDITED)
Hardware Segments Personal Enterprise Global (Dollars in millions) Technology Systems Systems Services ------------------------------------------------------------------------------------------------- Quarter Ended September 30, 2000: External revenue $ 2,632 $ 4,395 $ 2,358 $ 8,230 Internal revenue 675 24 133 654 ------- ------- ------- ------- Total revenue $ 3,307 $ 4,419 $ 2,491 $ 8,884 ======= ======= ======= ======= Pre-tax income (loss) $ 185 $ 65 $ 293 $ 1,147 ======= ======= ======= ======= Revenue year-to-year change (2.8)% 11.9% (6.6)% 3.5% Pre-tax income year-to-year change (41.6)% 641.7% (1.7)% (2.4)% Pre-tax income margin 5.6% 1.5% 11.8% 12.9% Quarter Ended September 30, 1999: External revenue $ 2,515 $ 3,937 $ 2,536 $ 7,898 Internal revenue 887 12 132 688 ------- ------- ------- ------- Total revenue $ 3,402 $ 3,949 $ 2,668 $ 8,586 ======= ======= ======= ======= Pre-tax income (loss) $ 317 $ (12) $ 298 $ 1,175 ======= ======= ======= ======= Pre-tax income margin 9.3% (0.3)% 11.2% 13.7%
Reconciliations to IBM as Reported:
Quarter Ended Quarter Ended (Dollars in millions) September 30, 2000 September 30, 1999 ------------------ ------------------ Revenue: Total reportable segments $ 23,601 $ 23,160 Eliminations/other (1,820) (2,016) -------- -------- Total IBM Consolidated $ 21,781 $ 21,144 ======== ======== Pretax income: Total reportable segments $ 2,444 $ 2,516 Sale of the IBM Global Network 0 586 Third quarter actions 0 (385) Eliminations/other 360 (88) -------- -------- Total IBM Consolidated $ 2,804 $ 2,629 ======== ========
- 25 -
Global Enterprise Total (Dollars in million) Software Financing Investments Segments ----------------------------------------------------------------------------------------------------------------- Quarter Ended September 30, 2000: External revenue $ 2,918 $ 868 $ 277 $ 21,678 Internal revenue 211 225 1 1,923 --------- -------- -------- -------- Total revenue $ 3,129 $ 1,093 $ 278 $ 23,601 ========= ======== ======== ======== Pre-tax income (loss) $ 515 $ 294 $ (55) $ 2,444 ========= ======== ======== ======== Revenue year-to-year change (1.5)% 11.5% (30.0)% 1.9% Pre-tax income year-to-year change (23.0)% 10.1% 72.2% (2.9)% Pre-tax income margin 16.5% 26.9% (19.8)% 10.4% Quarter Ended September 30, 1999: External revenue $ 3,010 $ 786 $ 393 $ 21,075 Internal revenue 168 194 4 2,085 --------- -------- -------- -------- Total revenue $ 3,178 $ 980 $ 397 $ 23,160 ========= ======== ======== ======== Pre-tax income (loss) $ 669 $ 267 $ (198) $ 2,516 ========= ======== ======== ======== Pre-tax income margin 21.1% 27.2% (49.9)% 10.9%
- 26 - SEGMENT INFORMATION (UNAUDITED)
Hardware Segments Personal Enterprise Global (Dollars in millions) Technology Systems Systems Services -------------------------------------------------------------------------------------------------------- Nine Months Ended September 30, 2000: External revenue $ 7,028 $ 11,570 $ 7,548 $ 23,966 Internal revenue 2,178 55 458 1,849 -------- -------- -------- -------- Total revenue $ 9,206 $ 11,625 $ 8,006 $ 25,815 ======== ======== ======== ======== Pre-tax income (loss) $ 431 $ (182) $ 1,180 $ 3,214 ======== ======== ======== ======== Revenue year-to-year change (6.4)% (1.7)% (8.6)% 1.5% Pre-tax income year-to-year change 6.4% (9.0)% (18.1)% (0.7)% Pre-tax income margin 4.7% (1.6)% 14.7% 12.5% Nine Months Ended September 30, 1999: External revenue $ 7,072 $ 11,799 $ 8,343 $ 23,436 Internal revenue 2,767 26 417 1,985 -------- -------- -------- -------- Total revenue $ 9,839 $ 11,825 $ 8,760 $ 25,421 ======== ======== ======== ======== Pre-tax income (loss) $ 405 $ (167) $ 1,440 $ 3,236 ======== ======== ======== ======== Pre-tax income margin 4.1% (1.4)% 16.4% 12.7%
Reconciliations to IBM as Reported:
Nine Months Ended Nine Months Ended (Dollars in millions) September 30, 2000 September 30, 1999 ------------------ ------------------ Revenue: Total reportable segments $ 68,436 $ 69,546 Eliminations/other (5,656) (6,180) -------- -------- Total IBM Consolidated $ 62,780 $ 63,366 ======== ======== Pretax income: Total reportable segments $ 7,153 $ 7,278 Sale of the IBM Global Network 0 4,016 Second and third quarter actions 0 (2,205) Eliminations/other 594 (317) -------- -------- Total IBM Consolidated $ 7,747 $ 8,772 ======== ========
- 27 -
Global Enterprise Total (Dollars in millions) Software Financing Investments Segments --------------------------------------------------------------------------------------------------------------- Nine Months Ended September 30, 2000: External revenue $ 9,027 $ 2,525 $ 939 $ 62,603 Internal revenue 595 695 3 5,833 --------- -------- -------- -------- Total revenue $ 9,622 $ 3,220 $ 942 $ 68,436 ========= ======== ======== ======== Pre-tax income (loss) $ 1,832 $ 888 $ (210) $ 7,153 ========= ======== ======== ======== Revenue year-to-year change 0.1% 12.1% (22.2)% (1.6)% Pre-tax income year-to-year change (14.0)% 15.5% 60.8% (1.7)% Pre-tax income margin 19.0% 27.6% (22.3)% 10.5% Nine Months Ended September 30, 1999: External revenue $ 9,056 $ 2,274 $ 1,193 $ 63,173 Internal revenue 561 599 18 6,373 --------- -------- -------- -------- Total revenue $ 9,617 $ 2,873 $ 1,211 $ 69,546 ========= ======== ======== ======== Pre-tax income (loss) $ 2,131 $ 769 $ (536) $ 7,278 ========= ======== ======== ======== Pre-tax income margin 22.2% 26.8% (44.3)% 10.5%
- 28 -