EX-12 4 a09-16493_1ex12.htm EX-12

 

EXHIBIT 12

 

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

FOR SIX MONTHS ENDED JUNE 30,

(UNAUDITED)

 

(Dollars in millions)

 

2009

 

2008

 

Income before income taxes (1)

 

$

7,390

 

$

7,015

 

 

 

 

 

 

 

Add: Fixed charges, excluding capitalized interest

 

858

 

917

 

 

 

 

 

 

 

Income as adjusted before income taxes

 

$

8,248

 

$

7,932

 

 

 

 

 

 

 

Fixed charges:

 

 

 

 

 

Interest expense

 

$

611

 

$

714

 

Capitalized interest

 

6

 

8

 

Portion of rental expense representative of interest

 

247

 

203

 

 

 

 

 

 

 

Total fixed charges

 

$

864

 

$

925

 

 

 

 

 

 

 

Ratio of earnings to fixed charges

 

9.55

 

8.58

 

(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

(UNAUDITED)

 

 

 

Global Services

 

 

 

 

 

 

 

 

 

(Dollars in millions)

 

Global
Technology
Services

 

Global
Business
Services

 

Software

 

Systems and
Technology

 

Global
Financing

 

Total
Segments

 

For the Three Months Ended June 30, 2009:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$

9,108

 

$

4,338

 

$

5,166

 

$

3,855

 

$

568

 

$

23,035

 

Internal revenue

 

343

 

223

 

614

 

244

 

447

 

1,870

 

Total revenue

 

$

9,451

 

$

4,562

 

$

5,780

 

$

4,098

 

$

1,014

 

$

24,905

 

Pre-tax income

 

$

1,405

 

$

608

 

$

1,852

 

$

333

 

$

465

 

$

4,663

 

Revenue year-to-year change

 

(9.9

)%

(15.0

)%

(8.2

)%

(24.5

)%

(12.5

)%

(13.3

)%

Pre-tax income year-to-year change

 

41.3

%

(4.5

)%

24.1

%

(16.7

)%

8.6

%

18.0

%

Pre-tax income margin

 

14.9

%

13.3

%

32.0

%

8.1

%

45.8

%

18.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended June 30, 2008:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$

10,100

 

$

5,107

 

$

5,574

 

$

5,212

 

$

634

 

$

26,626

 

Internal revenue

 

390

 

259

 

719

 

215

 

525

 

2,108

 

Total revenue

 

$

10,489

 

$

5,366

 

$

6,293

 

$

5,427

 

$

1,159

 

$

28,734

 

Pre-tax income

 

$

994

 

$

637

 

$

1,492

 

$

400

 

$

428

 

$

3,951

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax income margin

 

9.5

%

11.9

%

23.7

%

7.4

%

36.9

%

13.8

%

 

Reconciliations to IBM as Reported:

 

(Dollars in millions)

 

Three Months Ended
June 30, 2009

 

Three Months Ended
June 30, 2008

 

Revenue:

 

 

 

 

 

Total reportable segments

 

$

24,905

 

$

28,734

 

Eliminations/other

 

(1,655

)

(1,915

)

Total IBM Consolidated

 

$

23,250

 

$

26,820

 

 

 

 

 

 

 

Pre-tax income:

 

 

 

 

 

Total reportable segments

 

$

4,663

 

$

3,951

 

Eliminations/other

 

(401

)*

(138

)**

Total IBM Consolidated

 

$

4,262

 

$

3,814

 

*            Includes a provision for losses related to a joint venture investment.

**     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.

 

70


 

SEGMENT INFORMATION

(UNAUDITED)

 

 

 

Global Services

 

 

 

 

 

 

 

 

 

(Dollars in millions)

 

Global
Technology
Services

 

Global
Business
Services

 

Software

 

Systems and
Technology

 

Global
Financing

 

Total
Segments

 

For the Six Months Ended June 30, 2009:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$

17,862

 

$

8,736

 

$

9,705

 

$

7,083

 

$

1,146

 

$

44,533

 

Internal revenue

 

685

 

456

 

1,227

 

420

 

836

 

3,624

 

Total revenue

 

$

18,547

 

$

9,191

 

$

10,933

 

$

7,503

 

$

1,982

 

$

48,156

 

Pre-tax income

 

$

2,509

 

$

1,130

 

$

3,186

 

$

361

 

$

825

 

$

8,011

 

Revenue year-to-year change

 

(9.8

)%

(12.8

)%

(7.4

)%

(23.8

)%

(9.0

)%

(12.3

)%

Pre-tax income year-to-year change

 

26.6

%

(7.1

)%

15.5

%

(33.7

)%

1.1

%

9.5

%

Pre-tax income margin

 

13.5

%

12.3

%

29.1

%

4.8

%

41.6

%

16.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended June 30, 2008:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External revenue

 

$

19,777

 

$

10,018

 

$

10,421

 

$

9,431

 

$

1,266

 

$

50,913

 

Internal revenue

 

778

 

517

 

1,386

 

410

 

911

 

4,002

 

Total revenue

 

$

20,555

 

$

10,535

 

$

11,807

 

$

9,841

 

$

2,177

 

$

54,915

 

Pre-tax income

 

$

1,982

 

$

1,216

 

$

2,759

 

$

546

 

$

816

 

$

7,319

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax income margin

 

9.6

%

11.5

%

23.4

%

5.5

%

37.5

%

13.3

%

 

Reconciliations to IBM as Reported:

 

(Dollars in millions)

 

Six Months Ended
June 30, 2009

 

Six Months Ended
June 30, 2008

 

Revenue:

 

 

 

 

 

Total reportable segments

 

$

48,156

 

$

54,915

 

Eliminations/other

 

(3,195

)

(3,593

)

Total IBM Consolidated

 

$

44,962

 

$

51,322

 

 

 

 

 

 

 

Pre-tax income:

 

 

 

 

 

Total reportable segments

 

$

8,011

 

$

7,319

 

Eliminations/other

 

(627

)*

(307

)**

Total IBM Consolidated

 

$

7,385

 

$

7,012

 

*            Includes a provision for losses related to a joint venture investment.

**     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.

 

71