EXHIBIT 12
COMPUTATION OF RATIO OF INCOME FROM
CONTINUING OPERATIONS TO FIXED CHARGES
FOR NINE MONTHS ENDED SEPTEMBER 30,
(UNAUDITED)
(Dollars in millions)
|
|
|
2004 |
|
2003 |
|
||
|
|
|
|
|
|
|
||
|
Income from continuing operations before income taxes (1) |
|
$ |
7,600 |
|
$ |
6,989 |
|
|
|
|
|
|
|
|
||
|
Add: Fixed charges, excluding capitalized interest |
|
767 |
|
843 |
|
||
|
|
|
|
|
|
|
||
|
Income as adjusted before income taxes |
|
$ |
8,367 |
|
$ |
7,832 |
|
|
|
|
|
|
|
|
||
|
Fixed charges: |
|
|
|
|
|
||
|
Interest expense |
|
$ |
417 |
|
$ |
501 |
|
|
Capitalized interest |
|
8 |
|
11 |
|
||
|
Portion of rental expense representative of interest |
|
350 |
|
342 |
|
||
|
|
|
|
|
|
|
||
|
Total fixed charges |
|
$ |
775 |
|
$ |
854 |
|
|
Ratio of income from continuing operations to fixed charges |
|
10.80 |
|
9.17 |
|
||
(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.
63
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64
SEGMENT INFORMATION - ON CONTINUING OPERATIONS BASIS
(UNAUDITED)
|
|
|
Hardware Segments |
|
|||||||
|
(Dollars in millions) |
|
Global |
|
Systems and |
|
Personal |
|
|||
|
Three Months Ended September 30, 2004: |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||
|
External revenue |
|
$ |
11,392 |
|
$ |
4,117 |
|
$ |
3,261 |
|
|
Internal revenue |
|
791 |
|
265 |
|
52 |
|
|||
|
Total revenue |
|
$ |
12,183 |
|
$ |
4,382 |
|
$ |
3,313 |
|
|
Pre-tax income (loss) |
|
$ |
1,157 |
|
$ |
417 |
|
$ |
54 |
|
|
Revenue year-to-year change |
|
10.0 |
% |
9.7 |
% |
16.7 |
% |
|||
|
Pre-tax income year-to-year change |
|
(4.4 |
)% |
32.4 |
% |
nm |
% |
|||
|
Pre-tax income margin |
|
9.5 |
% |
9.5 |
% |
1.6 |
% |
|||
|
|
|
|
|
|
|
|
|
|||
|
Three Months Ended September 30, 2003: |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||
|
External revenue |
|
$ |
10,383 |
|
$ |
3,781 |
|
$ |
2,796 |
|
|
Internal revenue |
|
691 |
|
213 |
|
43 |
|
|||
|
Total revenue |
|
$ |
11,074 |
|
$ |
3,994 |
|
$ |
2,839 |
|
|
Pre-tax income (loss) |
|
$ |
1,210 |
|
$ |
315 |
|
$ |
(50 |
) |
|
|
|
|
|
|
|
|
|
|||
|
Pre-tax income margin |
|
10.9 |
% |
7.9 |
% |
(1.8 |
)% |
|||
Reconciliations to IBM as Reported:
|
|
|
Three Months Ended |
|
Three Months Ended |
|
||
|
(Dollars in millions) |
|
|
|
|
|
||
|
Revenue: |
|
|
|
|
|
||
|
Total reportable segments |
|
$ |
25,134 |
|
$ |
22,976 |
|
|
Eliminations/other |
|
(1,705 |
) |
(1,454 |
) |
||
|
Total IBM Consolidated |
|
$ |
23,429 |
|
$ |
21,522 |
|
|
Pretax income: |
|
|
|
|
|
||
|
Total reportable segments |
|
$ |
2,935 |
|
$ |
2,571 |
|
|
Eliminations/other |
|
(404 |
) |
(22 |
) |
||
|
Total IBM Consolidated |
|
$ |
2,531 |
|
$ |
2,549 |
|
65
|
(Dollars in millions) |
|
Software |
|
Global |
|
Enterprise |
|
Total |
|
||||
|
Three Months Ended September 30, 2004: |
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
External revenue |
|
$ |
3,621 |
|
$ |
634 |
|
$ |
257 |
|
$ |
23,282 |
|
|
Internal revenue |
|
433 |
|
309 |
|
2 |
|
1,852 |
|
||||
|
Total revenue |
|
$ |
4,054 |
|
$ |
943 |
|
$ |
259 |
|
$ |
25,134 |
|
|
Pre-tax income (loss) |
|
$ |
1,011 |
|
$ |
351 |
|
$ |
(55 |
) |
$ |
2,935 |
|
|
Revenue year-to-year change |
|
|
|
|
|
|
|
|
|
||||
|
Pre-tax income year-to-year change |
|
5.8 |
% |
(3.7 |
)% |
0.0 |
% |
9.4 |
% |
||||
|
Pre-tax income margin |
|
17.8 |
% |
20.2 |
% |
(1.9 |
)% |
14.2 |
% |
||||
|
|
|
24.9 |
% |
37.2 |
% |
(21.2 |
)% |
11.7 |
% |
||||
|
Three Months Ended September 30, 2003: |
|
|
|
|
|
|
|
|
|
||||
|
External revenue |
|
$ |
3,461 |
|
$ |
713 |
|
$ |
257 |
|
$ |
21,391 |
|
|
Internal revenue |
|
370 |
|
266 |
|
2 |
|
1,585 |
|
||||
|
Total revenue |
|
$ |
3,831 |
|
$ |
979 |
|
$ |
259 |
|
$ |
22,976 |
|
|
Pre-tax income (loss) |
|
$ |
858 |
|
$ |
292 |
|
$ |
(54 |
) |
$ |
2,571 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Pre-tax income margin |
|
22.4 |
% |
29.8 |
% |
(20.8 |
)% |
11.2 |
% |
||||
66
SEGMENT INFORMATION - ON CONTINUING OPERATIONS BASIS
(UNAUDITED)
|
|
|
Hardware Segments |
|
|||||||
|
(Dollars in millions) |
|
Global |
|
Systems and |
|
Personal |
|
|||
|
Nine Months Ended September 30, 2004: |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||
|
External revenue |
|
$ |
33,818 |
|
$ |
12,047 |
|
$ |
9,252 |
|
|
Internal revenue |
|
2,312 |
|
777 |
|
115 |
|
|||
|
Total revenue |
|
$ |
36,130 |
|
$ |
12,824 |
|
$ |
9,367 |
|
|
Pre-tax income (loss) |
|
$ |
3,237 |
|
$ |
1,190 |
|
$ |
70 |
|
|
|
|
|
|
|
|
|
|
|||
|
Revenue year-to-year change |
|
8.6 |
% |
11.9 |
% |
16.6 |
% |
|||
|
Pre-tax income year-to-year change |
|
(3.7 |
)% |
62.1 |
% |
nm |
% |
|||
|
Pre-tax income margin |
|
9.0 |
% |
9.3 |
% |
0.7 |
% |
|||
|
|
|
|
|
|
|
|
|
|||
|
Nine Months Ended September 30, 2003: |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||
|
External revenue |
|
$ |
31,187 |
|
$ |
10,875 |
|
$ |
7,909 |
|
|
Internal revenue |
|
2,085 |
|
590 |
|
123 |
|
|||
|
Total revenue |
|
$ |
33,272 |
|
$ |
11,465 |
|
$ |
8,032 |
|
|
Pre-tax income (loss) |
|
$ |
3,361 |
|
$ |
734 |
|
$ |
(127 |
) |
|
|
|
|
|
|
|
|
|
|||
|
Pre-tax income margin |
|
10.1 |
% |
6.4 |
% |
(1.6% |
) |
|||
Reconciliations to IBM as Reported:
|
(Dollars in millions) |
|
Nine Months Ended |
|
Nine Months Ended |
|
||
|
Revenue: |
|
|
|
|
|
||
|
Total reportable segments |
|
$ |
73,790 |
|
$ |
67,669 |
|
|
Eliminations/other |
|
(4,958 |
) |
(4,451 |
) |
||
|
Total IBM Consolidated |
|
$ |
68,832 |
|
$ |
63,218 |
|
|
|
|
|
|
|
|
||
|
Pretax income: |
|
|
|
|
|
||
|
Total reportable segments |
|
$ |
8,240 |
|
$ |
6,968 |
|
|
Eliminations/other |
|
(576 |
) |
28 |
|
||
|
Total IBM Consolidated |
|
$ |
7,664 |
|
$ |
6,996 |
|
67
|
(Dollars in millions) |
|
Software |
|
Global |
|
Enterprise |
|
Total |
|
||||
|
Nine Months Ended September 30, 2004: |
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
External revenue |
|
$ |
10,545 |
|
$ |
1,951 |
|
$ |
801 |
|
$ |
68,414 |
|
|
Internal revenue |
|
1,291 |
|
875 |
|
6 |
|
5,376 |
|
||||
|
Total revenue |
|
$ |
11,836 |
|
$ |
2,826 |
|
$ |
807 |
|
$ |
73,790 |
|
|
Pre-tax income (loss) |
|
$ |
2,823 |
|
$ |
1,073 |
|
$ |
(153 |
) |
$ |
8,240 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Revenue year-to-year change |
|
5.6 |
% |
(4.6 |
)% |
10.7 |
% |
9.0 |
% |
||||
|
Pre-tax income year-to-year change |
|
20.3 |
% |
24.6 |
% |
26.4 |
% |
18.3 |
% |
||||
|
Pre-tax income margin |
|
23.9 |
% |
38.0 |
% |
(19.0 |
)% |
11.2 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Nine Months Ended September 30, 2003: |
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
External revenue |
|
$ |
10,061 |
|
$ |
2,095 |
|
$ |
725 |
|
$ |
62,852 |
|
|
Internal revenue |
|
1,147 |
|
868 |
|
4 |
|
4,817 |
|
||||
|
Total revenue |
|
$ |
11,208 |
|
$ |
2,963 |
|
$ |
729 |
|
$ |
67,669 |
|
|
Pre-tax income (loss) |
|
$ |
2,347 |
|
$ |
861 |
|
$ |
(208 |
) |
$ |
6,968 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Pre-tax income margin |
|
20.9 |
% |
29.1 |
% |
(28.5 |
)% |
10.3 |
% |
||||
68