EX-12 8 a07-18155_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)

 

2007

 

2006

 

 

 

 

 

 

 

Income from continuing operations before income taxes (1)

 

$

5,725

 

$

5,330

 

 

 

 

 

 

 

Add: Fixed charges, excluding capitalized interest

 

814

 

675

 

 

 

 

 

 

 

Income as adjusted before income taxes

 

$

6,539

 

$

6,005

 

 

 

 

 

 

 

Fixed charges:

 

 

 

 

 

Interest expense

 

$

597

 

$

453

 

Capitalized interest

 

3

 

6

 

Portion of rental expense representative of interest

 

217

 

222

 

 

 

 

 

 

 

Total fixed charges

 

$

817

 

$

681

 

 

 

 

 

 

 

Ratio of income from continuing operations to fixed charges

 

8.00

 

8.82

 

 

(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.

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SEGMENT INFORMATION - ON CONTINUING OPERATIONS BASIS

(UNAUDITED)

 

 

Global Services

 

 

 

 

 

 

 

 

 

(Dollars in millions)

 

Global
Technology
Services

 

Global
Business
Services

 

Systems and
Technology

 

Software

 

Global
Financing

 

Total
Segments

 

Three Months Ended June 30, 2007:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$

8,756

 

$

4,338

 

$

5,102

 

$

4,777

 

$

597

 

$

23,571

 

Internal revenue

 

409

 

329

 

255

 

549

 

341

 

1,883

 

Total revenue

 

$

9,165

 

$

4,667

 

$

5,357

 

$

5,326

 

$

938

 

$

25,453

 

Pre-tax income

 

$

788

 

$

486

 

$

332

 

$

1,250

 

$

332

 

$

3,187

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue year-to-year change

 

9.1

%

8.8

%

1.4

%

11.3

%

2.6

%

7.5

%

Pre-tax income year-to-year change

 

0.1

%

19.2

%

77.0

%

8.2

%

4.2

%

11.6

%

Pre-tax income margin

 

8.6

%

10.4

%

6.2

%

23.5

%

35.4

%

12.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2006:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$

7,955

 

$

3,939

 

$

5,014

 

$

4,241

 

$

576

 

$

21,725

 

Internal revenue

 

449

 

351

 

271

 

543

 

338

 

1,952

 

Total revenue

 

$

8,404

 

$

4,290

 

$

5,286

 

$

4,784

 

$

914

 

$

23,677

 

Pre-tax income

 

$

787

 

$

407

 

$

187

 

$

1,156

 

$

319

 

$

2,856

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax income margin

 

9.4

%

9.5

%

3.5

%

24.2

%

34.9

%

12.1

%

 

Reconciliations to IBM as Reported:

(Dollars in millions)

 

Three Months Ended
June 30, 2007

 

Three Months Ended
June 30, 2006

 

Revenue:

 

 

 

 

 

Total reportable segments

 

$

25,453

 

$

23,677

 

Eliminations/other

 

(1,681

)

(1,787

)

Total IBM Consolidated

 

$

23,772

 

$

21,890

 

 

 

 

 

 

 

Pre-tax income:

 

 

 

 

 

Total reportable segments

 

$

3,187

 

$

2,856

 

Eliminations/other

 

(46

)*

32

 

Total IBM Consolidated

 

$

3,142

 

$

2,889

 

 

*

Includes the gain from the divestiture of the company’s printing business and the interest expense associated with the debt to support the company’s accelerated share repurchase.

 

61



SEGMENT INFORMATION - ON CONTINUING OPERATIONS BASIS

(UNAUDITED)

 

 

Global Services

 

 

 

 

 

 

 

 

 

(Dollars in millions)

 

Global
Technology
Services

 

Global
Business
Services

 

Systems and
Technology

 

Software

 

Global
Financing

 

Total
Segments

 

Six Months Ended June 30, 2007:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$

17,013

 

$

8,521

 

$

9,622

 

$

9,028

 

$

1,211

 

$

45,397

 

Internal revenue

 

834

 

630

 

523

 

1,134

 

689

 

3,810

 

Total revenue

 

$

17,848

 

$

9,152

 

$

10,145

 

$

10,162

 

$

1,901

 

$

49,207

 

Pre-tax income

 

$

1,469

 

$

955

 

$

428

 

$

2,286

 

$

706

 

$

5,844

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue year-to-year change

 

7.7

%

8.0

%

1.6

%

10.4

%

2.2

%

6.7

%

Pre-tax income year-to-year change

 

(10.0

)%

25.2

%

153.0

%

5.0

%

(3.7

)%

6.8

%

Pre-tax income margin

 

8.2

%

10.4

%

4.2

%

22.5

%

37.1

%

11.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2006:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$

15,674

 

$

7,787

 

$

9,433

 

$

8,147

 

$

1,158

 

$

42,200

 

Internal revenue

 

900

 

687

 

552

 

1,057

 

702

 

3,898

 

Total revenue

 

$

16,575

 

$

8,474

 

$

9,985

 

$

9,205

 

$

1,860

 

$

46,098

 

Pre-tax income

 

$

1,631

 

$

763

 

$

169

 

$

2,177

 

$

733

 

$

5,473

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax income margin

 

9.8

%

9.0

%

1.7

%

23.6

%

39.4

%

11.9

%

 

Reconciliations to IBM as Reported:

(Dollars in millions)

 

Six Months Ended
June 30, 2007

 

Six MonthsEnded
June 30, 2006

 

Revenue:

 

 

 

 

 

Total reportable segments

 

$

49,207

 

$

46,098

 

Eliminations/other

 

(3,406

)

(3,549

)

Total IBM Consolidated

 

$

45,801

 

$

42,549

 

 

 

 

 

 

 

Pre-tax income:

 

 

 

 

 

Total reportable segments

 

$

5,844

 

$

5,473

 

Eliminations/other

 

(124

)*

(145

)

Total IBM Consolidated

 

$

5,721

 

$

5,328

 

 

*

Includes the gain from the divestiture of the company’s printing business and the interest expense associated with the debt to support the company’s accelerated share repurchase.

 

62