# International Business Machines Corporation and Subsidiary Companies

## Consolidated Statement of Stockholders' Equity
for the year ended December 31:

| Capital Stock | Retained Earnings | Treasury Stock | Total |
|---------------|-------------------|----------------|-------|
| (Dollars in thousands) | | | |
| **1977** | | | |
| Balance, January 1, 1977 | $4,031,652 | $8,737,348 | $ (19,713) | $12,749,287 |
| Net earnings | | | | 2,719,414 |
| Cash dividends declared ($423,120, payable March 10, 1978) | | | (1,910,747) | (1,910,747) |
| Capital stock issued under employee plans (43,416 shares) | | 9,644 | | 9,644 |
| Purchases (1,285,400 shares) and sales (1,279,941 shares) of treasury stock under employee plan—net | | | (51,127) | (964) (52,091) |
| Capital stock purchased and canceled (3,261,629 shares) | | (87,330) | (817,208) | (904,538) |
| Tax reductions applicable to stock related to employee plans | | 7,504 | | 7,504 |
| Balance, December 31, 1977 | 3,961,470 | 8,677,680 | (20,677) | 12,618,473 |
| **1978** | | | | |
| Net earnings | | | | 3,110,568 |
| Cash dividends declared ($501,610, payable March 10, 1979) | | | (1,763,102) | (1,763,102) |
| Capital stock issued under employee plans (75,976 shares) | | 17,275 | | 17,275 |
| Purchases (1,392,775 shares) and sales (1,385,487 shares) of treasury stock under employee plan—net | | | (55,911) | (3,331) (59,242) |
| Capital stock purchased and canceled (1,729,200 shares) | | (46,449) | (393,781) | (440,230) |
| Tax reductions applicable to stock related to employee plans | | 9,868 | | 9,868 |
| Balance, December 31, 1978 | 3,942,164 | 9,575,454 | (24,008) | 13,493,610 |

The notes on pages 26 through 30 are an integral part of this statement.