EX-12 8 a07-24846_1ex12.htm EX-12

EXHIBIT 12

 

COMPUTATION OF RATIO OF INCOME FROM

CONTINUING OPERATIONS TO FIXED CHARGES

FOR NINE MONTHS ENDED SEPTEMBER 30,

(UNAUDITED)

 

(Dollars in millions)

 

2007

 

2006

 

 

 

 

 

 

 

Income from continuing operations before income taxes (1)

 

$

9,010

 

$

8,508

 

 

 

 

 

 

 

Add: Fixed charges, excluding capitalized interest

 

1,314

 

1,049

 

 

 

 

 

 

 

Income as adjusted before income taxes

 

$

10,324

 

$

9,557

 

 

 

 

 

 

 

Fixed charges:

 

 

 

 

 

Interest expense

 

$

989

 

$

716

 

Capitalized interest

 

6

 

9

 

Portion of rental expense representative of interest

 

325

 

333

 

 

 

 

 

 

 

Total fixed charges

 

$

1,320

 

$

1,058

 

 

 

 

 

 

 

Ratio of income from continuing operations to fixed charges

 

7.82

 

9.03

 

 

(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

 

 

 

 

 

 

 

 

 

 

 

Global 
Technology

 

Global 
Business

 

Systems
and

 

 

 

Global

 

Total

 

(Dollars in millions)

 

Services

 

Services

 

Technology

 

Software

 

Financing

 

Segments

 

Three Months Ended September 30, 2007:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$

9,093

 

$

4,586

 

$

4,898

 

$

4,694

 

$

623

 

$

23,894

 

Internal revenue

 

408

 

276

 

236

 

571

 

348

 

1,838

 

Total revenue

 

$

9,501

 

$

4,862

 

$

5,134

 

$

5,265

 

$

970

 

$

25,732

 

Pre-tax income

 

$

1,028

 

$

521

 

$

361

 

$

1,283

 

$

339

 

$

3,532

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue year-to-year change

 

12.0

%

13.2

%

(10.3

)%

6.0

%

5.1

%

5.5

%

Pre-tax income year-to-year change

 

26.3

%

28.6

%

(12.4

)%

(1.5

)%

1.1

%

8.1

%

Pre-tax income margin

 

10.8

%

10.7

%

7.0

%

24.4

%

34.9

%

13.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2006:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$

8,058

 

$

3,959

 

$

5,466

 

$

4,406

 

$

587

 

$

22,476

 

Internal revenue

 

428

 

337

 

255

 

559

 

337

 

1,916

 

Total revenue

 

$

8,486

 

$

4,295

 

$

5,721

 

$

4,965

 

$

924

 

$

24,391

 

Pre-tax income

 

$

814

 

$

405

 

$

413

 

$

1,302

 

$

335

 

$

3,268

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax income margin

 

9.6

%

9.4

%

7.2

%

26.2

%

36.2

%

13.4

%

 

Reconciliations to IBM as Reported:

 

 

 

Three Months Ended

 

Three Months Ended

 

(Dollars in millions)

 

September 30, 2007

 

September 30, 2006

 

Revenue:

 

 

 

 

 

Total reportable segments

 

$

25,732

 

$

24,391

 

Eliminations/other

 

(1,613

)

(1,774

)

Total IBM Consolidated

 

$

24,119

 

$

22,617

 

 

 

 

 

 

 

Pre-tax income:

 

 

 

 

 

Total reportable segments

 

$

3,532

 

$

3,268

 

Eliminations/other

 

(252

)*

(94

)

Total IBM Consolidated

 

$

3,280

 

$

3,174

 

 

* Includes interest expense associated with the debt to support the company’s accelerated share repurchase.

 

57


 

 

 

Global Services

 

 

 

 

 

 

 

 

 

 

 

Global 
Technology

 

Global 
Business

 

Systems and

 

 

 

Global

 

Total

 

(Dollars in millions)

 

Services

 

Services

 

Technology

 

Software

 

Financing

 

Segments

 

Nine Months Ended September 30, 2007:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$

26,106

 

$

13,108

 

$

14,520

 

$

13,723

 

$

1,834

 

$

69,291

 

Internal revenue

 

1,243

 

906

 

758

 

1,704

 

1,037

 

5,648

 

Total revenue

 

$

27,348

 

$

14,014

 

$

15,279

 

$

15,427

 

$

2,871

 

$

74,939

 

Pre-tax income

 

$

2,497

 

$

1,477

 

$

789

 

$

3,569

 

$

1,045

 

$

9,376

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue year-to-year change

 

9.1

%

9.7

%

(2.7

)%

8.9

%

3.1

%

6.3

%

Pre-tax income year-to-year change

 

2.1

%

26.4

%

35.7

%

2.6

%

(2.2

)%

7.3

%

Pre-tax income margin

 

9.1

%

10.5

%

5.2

%

23.1

%

36.4

%

12.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2006:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$

23,732

 

$

11,746

 

$

14,900

 

$

12,554

 

$

1,744

 

$

64,676

 

Internal revenue

 

1,328

 

1,023

 

807

 

1,616

 

1,039

 

5,814

 

Total revenue

 

$

25,061

 

$

12,769

 

$

15,706

 

$

14,170

 

$

2,784

 

$

70,490

 

Pre-tax income

 

$

2,445

 

$

1,168

 

$

582

 

$

3,478

 

$

1,068

 

$

8,741

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax income margin

 

9.8

%

9.1

%

3.7

%

24.5

%

38.4

%

12.4

%

 

Reconciliations to IBM as Reported:

 

 

 

Nine Months Ended

 

Nine Months Ended

 

(Dollars in millions)

 

September 30, 2007

 

September 30, 2006

 

Revenue:

 

 

 

 

 

Total reportable segments

 

$

74,939

 

$

70,490

 

Eliminations/other

 

(5,018

)

(5,323

)

Total IBM Consolidated

 

$

69,920

 

$

65,166

 

 

 

 

 

 

 

Pre-tax income:

 

 

 

 

 

Total reportable segments

 

$

9,376

 

$

8,741

 

Eliminations/other

 

(375

)*

(239

)

Total IBM Consolidated

 

$

9,001

 

$

8,503

 

 

* 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.

 

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