# International Business Machines Corporation and Subsidiary Companies

## Consolidated Statement of Earnings
for the year ended December 31:

(Dollars in millions except per share amounts)

|  | 1985 | 1984 | 1983 |
| --- | --- | --- | --- |
| **Gross Income:**<br> Sales | $34,404 | $29,753 | $23,274 |
| Services | 11,536 | 9,605 | 7,676 |
| Rentals | 4,116 | 6,579 | 9,230 |
| **Total** | $50,056 | $45,937 | $40,180 |

|  | 1985 | 1984 | 1983 |
| --- | --- | --- | --- |
| Cost of sales | 14,911 | 12,374 | 9,748 |
| Cost of services | 4,689 | 4,347 | 3,506 |
| Cost of rentals | 1,503 | 2,198 | 3,141 |
| Selling, general and administrative expenses | 13,000 | 11,587 | 10,614 |
| Research, development and engineering expenses | 4,723 | 4,200 | 3,582 |
| Interest expense | 443 | 408 | 390 |
| **Total** | 39,269 | 35,114 | 30,981 |

|  | 1985 | 1984 | 1983 |
| --- | --- | --- | --- |
| Other income, principally interest | 832 | 800 | 741 |
| Earnings before income taxes | 11,619 | 11,623 | 9,940 |
| Provision for income taxes | 5,064 | 5,041 | 4,455 |

|  | 1985 | 1984 | 1983 |
| --- | --- | --- | --- |
| Net Earnings | $6,555 | $6,582 | $5,485 |
| Per share | $10.67 | $10.77 | $9.04 |

| Average number of shares outstanding:<br>1985—614,084,568<br>1984—611,426,324<br>1983—606,769,848 |

The notes on pages 34 through 43 are an integral part of this statement.