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