IBM 1997 Annual Report Download - page 7

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For the year:
Revenue $78,508 $75,947
Earnings before income taxes $9,027 $8,587
Income taxes $2,934 $3,158
Net earnings $6,093 $5,429
Per share of common stock $6.18 $5.12*
Per share of common stock - assuming dilution $6.01 $5.01*
Cash dividends paid on common stock $763 $686
Per share of common stock $.775* $.65*
Investment in plant, rental machines and other property $6,793 $5,883
Average number of common shares outstanding (in millions) 983 1,057
At end of year:
Total assets $81,499 $81,132
Net investment in plant, rental machines and other property $18,347 $17,407
Working capital $6,911 $6,695
Total debt $26,926 $22,829
Stockholders’ equity $19,816 $21,628
Number of employees in IBM/wholly owned subsidiaries 269,465 240,615
Number of common stock holders 623,537 622,594
*Adjusted to reflect a two-for-one split of the common stock effective May 9, 1997
•Hardware grew 4 percent in constant currency.
Again, a closer look reveals important trends. In 1997
we thoroughly reinvigorated our entire server line.
Our new System/ 390 G4 enterprise servers represent
the complete conversion of our mainframes to
microprocessor technology. Overall, the System/ 390
line delivered 30 percent growth in shipments of
processing capacity. We introduced Web-enabled
RS/ 6000s and AS/400 servers. Our new Netfinity PC
server line, which brings our high-end server exper-
tise to bear on smaller-scale needs, has been eagerly
accepted by the market. Of particular note is our
storage business. Despite having invented magnetic
disk storage four decades ago and having pioneered
every significant development since then, IBM had
fallen seriously behind the competition. Today,
our storage business is winning again. Last year,
it gained further momentum by introducing a string
of leadership products and by growing revenue from
hard-disk drives twice as fast as the industry.
•Our success in disk drives highlights another
important story: the growth in sales of IBM tech-
nology and components to other companies, many
of them our competitors. Five years ago, our OEM
revenue was only about $1 billion. In 1997 it was
$5.6 billion, growing at double-digit rates, driven
mainly by OEM sales of disk drives and semicon-
ductors. We’re also generating more than $1 billion
annually by licensing IBM patents and other intel-
lectual property to technology companies.
•IBM’s commercial PC operations enjoyed a solid
year, helping our PC business maintain its
5
(Dollars in millions except per share amounts) 1997 1996
financial highlights
International Business Machines Corporation
and Subsidiary Companies