IBM 1998 Annual Report Download - page 66

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64
CONSOLIDATED STATEMENT OF EARNINGS International Business Machines Corporation and Subsidiary Companies
(Dollars in millions except per share amounts)
For the year ended December 31: Notes 1998 1997*1996*
Revenue:
Hardware segments $«35,419 $«36,630 $«36,634
Global Services segment 28,916 25,166 22,310
Software segment 11,863 11,164 11,426
Global Financing segment 2,877 2,806 3,054
Enterprise Investments segment /Other 2,592 2,742 2,523
Total revenue 81,667 78,508 75,947
Cost:
Hardware segments 24,214 23,473 22,888
Global Services segment 21,125 18,464 16,270
Software segment 2,260 2,785 2,946
Global Financing segment 1,494 1,448 1,481
Enterprise Investments segment /Other 1,702 1,729 1,823
Total cost 50,795 47,899 45,408
Gross profit 30,872 30,609 30,539
Operating expenses:
Selling, general and administrative R16,662 16,634 16,854
Research, development and engineering S5,046 4,877 5,089
Total operating expenses 21,708 21,511 21,943
Operating income 9,164 9,098 8,596
Other income, principally interest 589 657 707
Interest expense L713 728 716
Income before income taxes 9,040 9,027 8,587
Provision for income taxes Q2,712 2,934 3,158
Net income 6,328 6,093 5,429
Preferred stock dividends 20 20 20
Net income applicable to common shareholders $«««6,308 $«««6,073 $÷«5,409
Earnings per share of common stock—basic T$«««««6.75 $÷÷«6.18 $÷÷«5.12
Earnings per share of common stock—assuming dilution T$«««««6.57 $÷÷«6.01 $÷÷«5.01
Average number of common shares outstanding:
Basic: 1998 –934,502,785; 1997 –983,286,361; 1996 –1,056,704,188
Assuming dilution: 1998–960,065,235; 1997–1,010,934,942; 1996–1,079,708,904
*Reclassified to conform to 1998 presentation.
The notes on pages 69 through 89 of the 1998 IBM Annual Report are an integral part of this statement.