EX-12 4 a08-26479_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)

 

2008

 

2007

 

 

 

 

 

 

 

Income from continuing operations before income taxes (1)

 

$

10,924

 

$

9,010

 

 

 

 

 

 

 

Add: Fixed charges, excluding capitalized interest

 

1,372

 

1,314

 

 

 

 

 

 

 

Income as adjusted before income taxes

 

$

12,296

 

$

10,324

 

 

 

 

 

 

 

Fixed charges:

 

 

 

 

 

Interest expense

 

$

1,067

 

$

989

 

Capitalized interest

 

11

 

6

 

Portion of rental expense representative of interest

 

305

 

325

 

 

 

 

 

 

 

Total fixed charges

 

$

1,383

 

$

1,320

 

 

 

 

 

 

 

Ratio of income from continuing operations to fixed charges

 

8.89

 

7.82

 

 

(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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64


 

SEGMENT INFORMATION - ON CONTINUING OPERATIONS BASIS

(UNAUDITED)

 

 

 

Global Services

 

 

 

 

 

 

 

 

 

 

 

Global

 

Global

 

 

 

 

 

 

 

 

 

 

 

Technology

 

Business

 

Systems and

 

 

 

Global

 

Total

 

(Dollars in millions)

 

Services

 

Services

 

Technology

 

Software

 

Financing

 

Segments

 

Three Months Ended September 30, 2008:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$

9,864

 

$

4,900

 

$

4,431

 

$

5,249

 

$

633

 

$

25,077

 

Internal revenue

 

384

 

259

 

223

 

655

 

456

 

1,978

 

Total revenue

 

$

10,248

 

$

5,160

 

$

4,654

 

$

5,904

 

$

1,090

 

$

27,055

 

Pre-tax income

 

$

1,189

 

$

724

 

$

283

 

$

1,527

 

$

349

 

$

4,072

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue year-to-year change

 

7.9

%

6.1

%

(9.4

)%

12.1

%

12.3

%

5.1

%

Pre-tax income year-to-year change

 

15.6

%

38.9

%

(21.7

)%

19.0

%

3.2

%

15.3

%

Pre-tax income margin

 

11.6

%

14.0

%

6.1

%

25.9

%

32.0

%

15.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax income margin

 

10.8

%

10.7

%

7.0

%

24.4

%

34.9

%

13.7

%

 

Reconciliations to IBM as Reported:

 

 

 

Three Months Ended

 

Three Months Ended

 

(Dollars in millions)

 

September 30, 2008

 

September 30, 2007

 

Revenue:

 

 

 

 

 

Total reportable segments

 

$

27,055

 

$

25,732

 

Eliminations/other

 

(1,753

)

(1,613

)

Total IBM Consolidated

 

$

25,302

 

$

24,119

 

 

 

 

 

 

 

Pre-tax income:

 

 

 

 

 

Total reportable segments

 

$

4,072

 

$

3,532

 

Eliminations/other

 

(177

)*

(252

)**

Total IBM Consolidated

 

$

3,895

 

$

3,280

 

 

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

 

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

 

65


 

SEGMENT INFORMATION - ON CONTINUING OPERATIONS BASIS

(UNAUDITED)

 

 

 

Global Services

 

 

 

 

 

 

 

 

 

 

 

Global

 

Global

 

 

 

 

 

 

 

 

 

 

 

Technology

 

Business

 

Systems and

 

 

 

Global

 

Total

 

(Dollars in millions)

 

Services

 

Services

 

Technology

 

Software

 

Financing

 

Segments

 

Nine Months Ended September 30, 2008:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$

29,640

 

$

14,918

 

$

13,862

 

$

15,670

 

$

1,900

 

$

75,990

 

Internal revenue

 

1,162

 

776

 

633

 

2,041

 

1,367

 

5,980

 

Total revenue

 

$

30,803

 

$

15,694

 

$

14,495

 

$

17,711

 

$

3,267

 

$

81,970

 

Pre-tax income

 

$

3,171

 

$

1,940

 

$

829

 

$

4,286

 

$

1,165

 

$

11,391

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue year-to-year change

 

12.6

%

12.0

%

(5.1

)%

14.8

%

13.8

%

9.4

%

Pre-tax income year-to-year change

 

27.0

%

31.4

%

5.0

%

20.1

%

11.6

%

21.5

%

Pre-tax income margin

 

10.3

%

12.4

%

5.7

%

24.2

%

35.7

%

13.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax income margin

 

9.1

%

10.5

%

5.2

%

23.1

%

36.4

%

12.5

%

 

Reconciliations to IBM as Reported:

 

 

 

Nine Months Ended

 

Nine Months Ended

 

(Dollars in millions)

 

September 30, 2008

 

September 30, 2007

 

Revenue:

 

 

 

 

 

Total reportable segments

 

$

81,970

 

$

74,939

 

Eliminations/other

 

(5,347

)

(5,018

)

Total IBM Consolidated

 

$

76,623

 

$

69,920

 

 

 

 

 

 

 

Pre-tax income:

 

 

 

 

 

Total reportable segments

 

$

11,391

 

$

9,376

 

Eliminations/other

 

(484

)*

(375

)*

Total IBM Consolidated

 

$

10,907

 

$

9,001

 

 

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

 

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