EX-12 4 a04-7971_1ex12.htm EX-12

EXHIBIT 12

 

COMPUTATION OF RATIO OF INCOME FROM

CONTINUING OPERATIONS TO FIXED CHARGES

FOR SIX MONTHS ENDED JUNE 30,

(UNAUDITED)

 

(Dollars in millions)

 

2004

 

2003

 

 

 

 

 

 

 

Income from continuing operations before income taxes (1)

 

$

5,126

 

$

4,442

 

 

 

 

 

 

 

Add: Fixed charges, excluding capitalized interest

 

514

 

571

 

 

 

 

 

 

 

Income as adjusted before income taxes

 

$

5,640

 

$

5,013

 

 

 

 

 

 

 

Fixed charges:

 

 

 

 

 

Interest expense

 

$

281

 

$

343

 

Capitalized interest

 

3

 

9

 

Portion of rental expense representative of interest

 

233

 

228

 

 

 

 

 

 

 

Total fixed charges

 

$

517

 

$

580

 

 

 

 

 

 

 

Ratio of income from continuing operations to fixed charges

 

10.91

 

8.64

 

 

(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.

 

1

 

(This page is intentionally left blank.)

 

2

 

SEGMENT INFORMATION - ON CONTINUING OPERATIONS BASIS

(UNAUDITED)

 

 

 

 

 

Hardware Segments

 

(Dollars in millions)

 

Global
Services

 

Systems and
Technology
Group

 

Personal
Systems
Group

 

Three Months Ended June 30, 2004:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$

11,327

 

$

4,154

 

$

3,165

 

Internal revenue

 

759

 

276

 

40

 

Total revenue

 

$

12,086

 

$

4,430

 

$

3,205

 

Pre-tax income (loss)

 

$

1,089

 

$

603

 

$

27

 

 

 

 

 

 

 

 

 

Revenue year-to-year change

 

6.7

%

11.4

%

15.8

%

Pre-tax income year-to-year change

 

(6.8

)%

151.3

%

437.5

%

Pre-tax income margin

 

9.0

%

13.6

%

0.8

%

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2003:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$

10,635

 

$

3,786

 

$

2,723

 

Internal revenue

 

695

 

192

 

44

 

Total revenue

 

$

11,330

 

$

3,978

 

$

2,767

 

Pre-tax income (loss)

 

$

1,168

 

$

240

 

$

(8

)

 

 

 

 

 

 

 

 

Pre-tax income margin

 

10.3

%

6.0

%

(0.3

)%

 

Reconciliations to IBM as Reported:

 

(Dollars in millions)

 

Three Months Ended
June 30, 2004

 

Three Months Ended
June 30, 2003

 

Revenue:

 

 

 

 

 

Total reportable segments

 

$

24,845

 

$

23,152

 

Eliminations/other

 

(1,692

)

(1,521

)

Total IBM Consolidated

 

$

23,153

 

$

21,631

 

 

 

 

 

 

 

Pretax income:

 

 

 

 

 

Total reportable segments

 

$

2,979

 

$

2,459

 

Eliminations/other

 

(136

)

7

 

Total IBM Consolidated

 

$

2,843

 

$

2, 466

 

 

3

 

(Dollars in millions)

 

Software

 

Global
Financing

 

Enterprise
Investments

 

Total
Segments

 

Three Months Ended June 30, 2004:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$

3,458

 

$

652

 

$

269

 

$

23,025

 

Internal revenue

 

457

 

286

 

2

 

1,820

 

Total revenue

 

$

3,915

 

$

938

 

$

271

 

$

24,845

 

Pre-tax income (loss)

 

$

958

 

$

348

 

$

(46

)

$

2,979

 

 

 

 

 

 

 

 

 

 

 

Revenue year-to-year change

 

1.4

%

(5.1

)%

18.9

%

7.3

%

Pre-tax income year-to-year change

 

12.7

%

17.6

%

47.1

%

21.1

%

Pre-tax income margin

 

24.5

%

37.1

%

(17.0

)%

12.0

%

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2003:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$

3,471

 

$

681

 

$

227

 

$

21,523

 

Internal revenue

 

390

 

307

 

1

 

1,629

 

Total revenue

 

$

3,861

 

$

988

 

$

228

 

$

23,152

 

Pre-tax income (loss)

 

$

850

 

$

296

 

$

(87

)

$

2,459

 

 

 

 

 

 

 

 

 

 

 

Pre-tax income margin

 

22.0

%

30.0

%

(38.2

)%

10.6

%

 

4

 

 

 

 

 

Hardware Segments

 

(Dollars in millions)

 

Global
Services

 

Systems and
Technology
Group

 

Personal
Systems
Group

 

Six Months Ended June 30, 2004:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$

22,426

 

$

7,930

 

$

5,991

 

Internal revenue

 

1,521

 

512

 

63

 

Total revenue

 

$

23,947

 

$

8,442

 

$

6,054

 

Pre-tax income (loss)

 

$

2,080

 

$

773

 

$

16

 

 

 

 

 

 

 

 

 

Revenue year-to-year change

 

7.9

%

13.0

%

16.6

%

Pre-tax income year-to-year change

 

(3.3

)%

84.5

%

120.8

%

Pre-tax income margin

 

8.7

%

9.2

%

0.3

%

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2003:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$

20,804

 

$

7,094

 

$

5,113

 

Internal revenue

 

1,394

 

377

 

80

 

Total revenue

 

$

22,198

 

$

7,471

 

$

5,193

 

Pre-tax income (loss)

 

$

2,151

 

$

419

 

$

(77

)

 

 

 

 

 

 

 

 

Pre-tax income margin

 

9.7

%

5.6

%

(1.5

)%

 

Reconciliations to IBM as Reported:

 

(Dollars in millions)

 

Six Months Ended
June 30, 2004

 

Six Months Ended
June 30, 2003

 

Revenue:

 

 

 

 

 

Total reportable segments

 

$

48,656

 

$

44,693

 

Eliminations/other

 

(3,253

)

(2,997

)

Total IBM Consolidated

 

$

45,403

 

$

41,696

 

 

 

 

 

 

 

Pretax income:

 

 

 

 

 

Total reportable segments

 

$

5,305

 

$

4,397

 

Eliminations/other

 

(172

)

50

 

Total IBM Consolidated

 

$

5,133

 

$

4,447

 

 

5

 

(Dollars in millions)

 

Software

 

Global
Financing

 

Enterprise
Investments

 

Total
Segments

 

Six Months Ended June 30, 2004:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$

6,924

 

$

1,317

 

$

544

 

$

45,132

 

Internal revenue

 

858

 

566

 

4

 

3,524

 

Total revenue

 

$

7,782

 

$

1,883

 

$

548

 

$

48,656

 

Pre-tax income (loss)

 

$

1,812

 

$

722

 

$

(98

)

$

5,305

 

 

 

 

 

 

 

 

 

 

 

Revenue year-to-year change

 

5.5

%

(5.1

)%

16.6

%

8.9

%

Pre-tax income year-to-year change

 

21.7

%

26.9

%

36.4

%

20.7

%

Pre-tax income margin

 

23.3

%

38.3

%

(17.9

)%

10.9

%

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2003:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$

6,600

 

$

1,382

 

$

468

 

$

41,461

 

Internal revenue

 

777

 

602

 

2

 

3,232

 

Total revenue

 

$

7,377

 

$

1,984

 

$

470

 

$

44,693

 

Pre-tax income (loss)

 

$

1,489

 

$

569

 

$

(154

)

$

4,397

 

 

 

 

 

 

 

 

 

 

 

Pre-tax income margin

 

20.2

%

28.7

%

(32.8

)%

9.8

%

 

6