1Q05   IBM Income Statement   Apr-05
      - ACTUAL 4/14/05 -        
    Currency boost: 2%        
    1Q05 % of Annual 1Q04* % of 1Q03 % of
    ($ mill) Total Change ($ mill) Total ($ mill) Total
Revenue (Gross Income):              
                 
Hardware 7,206 6,749 29.5% 0.2% 6,735 30.4% 5,808 28.9%
Services 10,256 10,353 45.2% 6.4% 9,730 43.9% 8,941 44.6%
Maintenance 1,343 1,343 5.9% 2.0% 1,316 5.9% 1,228 6.1%
Software 3,744 3,551 15.5% 2.4% 3,466 15.6% 3,129 15.6%
Enterprise Investments 316 332 1.4% 15.3% 288 1.3% 254 1.3%
Global Financing 695 580 2.5% -12.5% 662 3.0% 705 3.5%
                 
Total Revenue 23,560 22,908 100.0% 3.3% 22,175 100.1% 20,065 100.0%
Currency adjusted 1.2% 22,450            
Costs GM              
Cost of Hardware 27.5% 4,894 21.4% -0.9% 4,940 22.3% 4,263 21.2%
Cost of Services 22.3% 8,049 35.1% 6.6% 7,549 34.0% 6,924 34.5%
Cost of Maintenance 40.0% 806 3.5% 2.0% 790 3.6% 712 3.5%
Cost of Software 86.4% 483 2.1% -0.8% 487 2.2% 482 2.4%
Enterprise Investments 52.5% 157 0.7% -9.5% 174 0.8% 161 0.8%
Global Financing 54.5% 264 1.2% 1.0% 261 1.2% 290 1.4%
                 
Total Oper. Costs   14,654 64.0% 3.2% 14,201 64.0% 12,832 64.0%
                 
Gross Profit 8,574 8,254 36.0% 3.5% 7,974 36.0% 7,233 36.0%
               
SG&A Expenses*   4,933 21.5% 5.9% 4,658 21.0% 4,216 21.0%
                 
RD&E Expenses*   1,459 6.4% 3.1% 1,416 6.4% 1,195 6.0%
Total Costs & Expenses 21,046 91.9% 3.8% 20,275 91.4% 18,243 90.9%
Operating Income 2,588 1,862 8.1% -2.0% 1,900 8.6% 1,823 9.1%
Intellectual Property Income (219) -1.0% 21.7% (180) -0.8% (282) -1.4%
Other Income*   22 0.1% 69.2% 13 0.1% 84 0.4%
Interest Expenses*   49 0.2% 40.0% 35 0.2% 40 0.2%
                 
Earnings (Loss) Before Tax 2,010 8.8% -1.1% 2,032 9.2% 1,981 9.9%
Tax/Rate   603 30.0% -11.7% 683 33.6% 594 30.0%
Disco'd Operations   (5)         (3)  
Net Earnings 1,905 1,402 6.1% 3.9% 1,349 6.1% 1,384 6.9%
                 
Shares # (basic)   1,628.7   -3.7% 1,691.7   1,725.3  
EPS (basic)   0.86   7.9% 0.80   0.80  
EPS adj. for 37.3% tax 0.52   -39% 0.54   0.53  
% currency rates, share buybacks 2,340 (1995 # shares, adjusted for splits)    
Gross Profit:   GP G M   GP G M GP G M
                 
Hardware   1,855 27.5% 3.3% 1,795 26.7% 1,545 26.6%
Services   2,304 22.3% 5.6% 2,181 22.4% 2,017 22.6%
Software   3,068 86.4% 3.0% 2,979 86.0% 2,647 84.6%
Maintenance   537 40.0% 2.0% 526 40.0% 516 42.0%
Enterprise Investments   174 52.5% 53.3% 114 39.5% 93 36.6%
Global Financing   316 54.5% -21.2% 401 60.6% 415 58.9%
                 
  Source: Annex Research   *Restated