IBM 1997 Annual Report Download - page 52

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(Dollars in millions except per share amounts)
For the year ended December 31: Notes 1997 1996 1995
Revenue:
Hardware sales $36,229 $36,316 $35,600
Services 19,302 15,873 12,714
Software 12,844 13,052 12,657
Maintenance 6,402 6,981 7,409
Rentals and financing Q3,731 3,725 3,560
Total revenue 78,508 75,947 71,940
Cost:
Hardware sales 23,538 23,396 21,862
Services 15,281 12,647 10,042
Software 3,784 4,082 4,428
Maintenance 3,394 3,659 3,651
Rentals and financing 1,902 1,624 1,590
Total cost 47,899 45,408 41,573
Gross profit 30,609 30,539 30,367
Operating expenses:
Selling, general and administrative O16,634 16,854 16,766
Research, development and engineering P4,877 4,654 4,170
Purchased in-process research
and development P–435 1,840
Total operating expenses 21,511 21,943 22,776
Operating income 9,098 8,596 7,591
Other income, principally interest 657 707 947
Interest expense H728 716 725
Earnings before income taxes 9,027 8,587 7,813
Provision for income taxes N2,934 3,158 3,635
Net earnings 6,093 5,429 4,178
Preferred stock dividends and transaction costs 20 20 62
Net earnings applicable
to common shareholders $6,073 $5,409 $4,116
Net earnings per share of common stock C & R $6.18 $5.12*$3.61*
Net earnings per share
of common stock – assuming dilution C & R $6.01 $5.01*$3.53*
Average number of common shares outstanding:
1997 – 983,286,361; 1996 – 1,056,704,188*; 1995 – 1,138,768,058 *
*Adjusted to reflect a two-for-one stock split on May 9, 1997.
The notes on pages 54 through 77 of the 1997 IBM Annual Report are an integral part of this statement.
consolidated statement of earnings
International Business Machines Corporation
and Subsidiary Companies
50