EX-12 7 a05-7213_1ex12.htm EX-12

EXHIBIT 12

 

COMPUTATION OF RATIO OF INCOME FROM
CONTINUING OPERATIONS TO FIXED CHARGES
FOR THREE MONTHS ENDED  MARCH 31,
(UNAUDITED)

 

(Dollars in millions)

 

2005

 

2004*

 

 

 

 

 

 

 

Income from continuing operations before income taxes (1)

 

$

2 ,010

 

$

1,950

 

 

 

 

 

 

 

Add: Fixed charges, excluding capitalized interest

 

291

 

260

 

 

 

 

 

 

 

Income as adjusted before income taxes

 

$

2,301

 

$

2,210

 

 

 

 

 

 

 

Fixed charges:

 

 

 

 

 

Interest expense

 

$

176

 

$

143

 

Capitalized interest

 

3

 

—

 

Portion of rental expense representative of interest

 

115

 

117

 

 

 

 

 

 

 

Total fixed charges

 

$

294

 

$

260

 

 

 

 

 

 

 

Ratio of income from continuing operations to fixed charges

 

7.83

 

8.50

 

 

(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.

 

* Restated to include the impact of share-based compensation expense; see Note 3 on page 6 for additional information.

 


 

SEGMENT INFORMATION - ON CONTINUING OPERATIONS BASIS*

(UNAUDITED)

 

 

 

 

 

Hardware Segments

 

(Dollars in millions)

 

Global
Services

 

Systems and
Technology
Group

 

Personal
Systems
Group

 

Quarter Ended March 31, 2005:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$

11,696

 

$

3,869

 

$

2,739

 

Internal revenue

 

745

 

235

 

32

 

Total revenue

 

$

12,441

 

$

4,104

 

$

2,771

 

Pre-tax income (loss)

 

$

942

 

$

109

 

$

(17

)

 

 

 

 

 

 

 

 

Revenue year-to-year change

 

5.6

%

2.3

%

(2.7

)%

Pre-tax income year-to-year change

 

(4.9

)%

(35.9

)%

(54. 5

)%

Pre-tax income margin

 

7.6

%

2.7

%

(0.6

)%

 

 

 

 

 

 

 

 

Quarter Ended March 31, 2004:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$

11,024

 

$

3,776

 

$

2,826

 

Internal revenue

 

762

 

236

 

23

 

Total revenue

 

$

11,786

 

$

4,012

 

$

2,849

 

Pre-tax income (loss)

 

$

991

 

$

170

 

$

(11

)

 

 

 

 

 

 

 

 

Pre-tax income margin

 

8.4

%

4.2

%

(0.4

)%

 

 

 

 

 

 

 

 

nm - not meaningful

 

 

 

 

 

 

 

 

Reconciliations to IBM as Reported:

 

(Dollars in millions)

 

Quarter Ended
March 31, 2005

 

Quarter Ended
March 31, 2004

 

Revenue:

 

 

 

 

 

Total reportable segments

 

$

24,650

 

$

23,736

 

Eliminations/other

 

(1,742

)

(1,561

)

Total IBM Consolidated

 

$

22,908

 

$

22,175

 

 

 

 

 

 

 

Pretax income:

 

 

 

 

 

Total reportable segments

 

$

2,291

 

$

2,326

 

Incremental equity compensation expense

 

(246

)

(340

)

Eliminations /other

 

(35

)

(36

)

Total IBM Consolidated

 

$

2,010

 

$

1,950

 

 

* Segment information for the quarters ending March 31, 2005 and March 31, 2004 does not include the impacts of the company’s implementation of SFAS 123(R), “Share-Based Payment” in the first quarter.

 


 

Software

 

Global
Financing

 

Enterprise
Investments

 

Total
Segments

 

 

 

 

 

 

 

 

 

$

3,551

 

$

579

 

$

292

 

$

22,726

 

461

 

449

 

2

 

1,924

 

$

4,012

 

$

1,028

 

$

294

 

$

24,650

 

$

893

 

$

396

 

$

(32

)

$

2,291

 

 

 

 

 

 

 

 

 

3.7

%

8.8

%

6.1

%

3.9

%

4.6

%

5.9

%

38.5

%

(1.5

)%

22.3

%

38.5

%

(10.9

)%

9.3

%

 

 

 

 

 

 

 

 

$

3,466

 

$

665

 

$

275

 

$

22,032

 

401

 

280

 

2

 

1,704

 

$

3,867

 

$

945

 

$

277

 

$

23,736

 

$

854

 

$

374

 

$

(52

)

$

2, 326

 

 

 

 

 

 

 

 

 

22.1

%

39.6

%

(18.8

)%

9.8

%