EX-12 3 0003.txt COMPUTATION OF RATIO EXHIBIT 12 COMPUTATION OF RATIO OF NET INCOME TO FIXED CHARGES AND NET INCOME TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS FOR THREE MONTHS ENDED MARCH 31, (UNAUDITED) (Dollars in millions) 2001 2000 ---- ---- Income before income taxes (1) $2,496 $2,161 Add: Fixed charges, excluding capitalized interest 475 452 ------ ------ Income as adjusted before income taxes $2,971 $2,613 ====== ====== Fixed charges: Interest expense $ 361 $ 342 Capitalized interest 7 7 Portion of rental expense representative of interest 114 110 ------ ------ Total fixed charges $ 482 $ 459 ====== ====== Preferred stock dividends (2) 7 7 ------ ------ Combined fixed charges and preferred stock dividends $ 489 $ 466 ====== ====== Ratio of net income to fixed charges 6.16 5.69 Ratio of net income to combined fixed charges and preferred stock dividends 6.08 5.61 (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 $5 million for the first three months of 2001 and 2000, or $7 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 three months ended March 31, 2001 and 2000. -25- SEGMENT INFORMATION (UNAUDITED)
Hardware Segments --------------------------------------- Personal and Printing Enterprise Global Global Enterprise Total (Dollars in millions) Technology Systems Systems Services Software Financing Investments Segments ---------- ------- ------- -------- ------- ------- ------- ------- Quarter Ended March 31, 2001: External revenue $ 2,317 $ 3,176 $ 3,136 $ 8,471 $2,918 $834 $253 $21,105 Internal revenue 549 18 167 589 214 226 1 1,764 ------- ------- ------- ------- ------- ------- ------- ------- Total revenue $ 2,866 $ 3,194 $ 3,303 $ 9,060 $3,132 $1,060 $254 $22,869 ======= ======= ======= ======= ======= ======= ======= ======= Pre-tax income (loss) $ 131 $ (58) $ 391 $ 1,068 $586 $273 $(140) $2,251 ======= ======= ======= ======= ======= ======= ======= ======= Revenue year-to-year change 22.3% 2.0% 6.2% 11.2% 1.0% 2.5% (25.7)% 7.8% Pre-tax income year-to-year change nm 35.6% 6.0% 7.0% 0.9% (5.2)% (225.6)% 6.9% Pre-tax income margin 4.6% (1.8)% 11.8% 11.8% 18.7% 25.8% (55.1)% 9.8% Quarter Ended March 31, 2000*: External revenue $ 1,553 $ 3,120 $ 2,944 $ 7,552 $2,927 $828 $341 $19,265 Internal revenue 791 10 165 595 175 206 1 1,943 ------- ------- ------- ------- ------- ------- ------- ------- Total revenue $ 2,344 $ 3,130 $ 3,109 $ 8,147 $3,102 $1,034 $342 $21,208 ======= ======= ======= ======= ======= ======= ======= ======= Pre-tax income (loss) $ 2 $ (90) $ 369 $ 998 $581 $288 $(43) $2,105 ======= ======= ======= ======= ======= ======= ======= ======= Pre-tax income margin 0.1% (2.9)% 11.9% 12.2% 18.7% 27.9% (12.6)% 9.9%
nm - not meaningful * Reclassified to conform with 2001 presentation. Reconciliations to IBM as Reported: Quarter Ended Quarter Ended (Dollars in millions) March 31, 2001 March 31, 2000 -------------- -------------- Revenue: Total reportable segments $ 22,869 $ 21,208 Eliminations/other (1,825) (1,860) -------- -------- Total IBM Consolidated $ 21,044 $ 19,348 ======== ======== Pretax income: Total reportable segments $ 2,251 $ 2,105 Eliminations/other 238 65 -------- -------- Total IBM Consolidated $ 2,489 $ 2,170 ======== ======== -26- & -27- SEGMENT INFORMATION PRE-TAX INCOME EFFECT OF ORGANIZATIONAL CHANGES Quarter Ended March 31, 2000 ------------------------------------------ Previously Reported Pre-tax Organization Pre-tax (Dollars in millions) Income Changes Income ------ ------- ------ Technology $ 20 $ (18) $ 2 Personal and Printing Systems (178) 88 (90) Enterprise Systems 439 (70) 369 Global Services 998 -- 998 Software 581 -- 581 Global Financing 288 -- 288 Enterprise Investments (43) -- (43) ----------------------------------------- Total Segments $ 2,105 $ -- $ 2,105 ======= ======= ======= -28- (THIS PAGE INTENTIONALLY LEFT BLANK) -29-