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value | date stringlengths 8 8 | form stringclasses 4
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0000320193 | 20060505 | 10-Q | 444 | These increases are primarily attributable to an increase in total stores from 103 stores at the end of the second quarter of 2005 to 141 stores at the end of the second quarter of 2006, resulting in an average of 138 stores open during the quarter. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 445 | During the second quarter of 2006, average revenue per store decreased to $4.6 million from $5.6 million in the second quarter of 2005. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 446 | The Company believes the decrease in average revenue per store was primarily caused by the continued expansion of iPod points of distribution and a delay in purchases of Macintosh computers due to the Intel transition. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 447 | With an average of 133 stores open during the first six months of 2006, average revenue per store increased to $12.8 million from $11.6 million in the first six months of 2005. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 448 | This increase in average revenue per store was primarily due to strong sales of iPods, other music related products and services, and Macintosh portable products during the first quarter of 2006, partially offset by the slowdown in Macintosh sales during the second quarter of 2006. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 449 | • Net sales of peripherals and other hardware declined $16 million or 6% during the second quarter of 2006 compared to the second quarter of 2005 due to a decrease in net sales of displays partially offset by an increase in RAID storage and other hardware accessories including printers. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 450 | During the first six months of 2006 net sales of peripherals and other hardware rose $3 million or 1% compared to the same period in 2005 due to an increase in net sales of RAID storage and other hardware accessories partially offset by a decrease in net sales of displays. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 451 | Segment Operating Performance
The Company manages its business primarily on a geographic basis. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 452 | The Company’s reportable operating segments are comprised of the Americas, Europe, Japan, and Retail. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 453 | The Americas, Europe, and Japan reportable segments do not include activities related to the Retail segment. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 454 | The Americas segment includes both North and South America. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 455 | The Europe segment includes European countries as well as the Middle East and Africa. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 456 | The Retail segment operates Apple-owned retail stores in the U.S., Canada, Japan, and the U.K. Each reportable geographic operating segment provides similar hardware and software products and similar services. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 457 | Further information regarding the Company’s operating segments may be found in Part I, Item 1 of this Form 10-Q in the Notes to Condensed Consolidated Financial Statements at Note 8, “Segment Information and Geographic Data.”
Americas
Net sales in the Americas segment during the second quarter of 2006 increased $679 mi... | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 458 | The increase in net sales during the second quarter was primarily attributable to the significant growth in iPod sales, sales of other music related products and services, sales of desktop and portable Macintosh systems, and sales of APP. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 459 | During the second quarter of 2006, the Americas segment represented approximately 49% of the Company’s total net sales as compared to 44% in the same period of 2005. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 460 | For the first six months of 2006, net sales in the Americas segment increased $1.7 billion, or 57%, compared to the same period in 2005. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 461 | The main driving factors for this increase were significant year-over-year increases in net sales of iPods, other music related products and services, portable Macintosh systems, and third-party software. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 462 | This increase in net sales was partially offset by a decrease in desktop net sales. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 463 | During the first six months of 2006, the Americas segment represented approximately 48% of the Company’s total net sales as compared to 46% in the same period of 2005. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 464 | Europe
Net sales in Europe increased $261 million or 37% during the second quarter of 2006 compared to the same period in 2005. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 465 | Total Macintosh unit sales in Europe were up 14% in the second quarter of 2006 compared to the same period in 2005. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 466 | The Europe segment experienced strong sales of iPods, portable Macintosh systems, Internet services, Apple-branded software, and other music related products and services. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 467 | Europe segment net sales increased $656 million or 42% during the first six months of 2006 compared to the same period in 2005. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 468 | Total Macintosh unit sales in Europe were up 18% in the first six months of 2006 compared to the same period in 2005. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 469 | These increases were a result of strong growth in iPod sales, other music related products and services, and portable Macintosh systems. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 470 | This segment also reported increased sales in APP, Apple-branded and third-party software, and Internet services, which was partially offset by a slight decrease in desktop net sales during the first half of 2006 compared to the same period in 2005. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 471 | Japan
Japan’s net sales increased 9% or $25 million during the second quarter of 2006 compared to the same period in 2005. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 472 | Japan experienced increased net sales in iPods, Apple-branded software, APP, and other music related products and services. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 473 | These increases were partially offset by decreases in net sales of Macintosh desktop and portable systems and displays, and the weakening of the Yen. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 474 | Total Macintosh unit sales decreased by 20% during the second quarter of 2006 compared to the same period in 2005. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 475 | The Company believes the decrease was attributable to a pause in demand related to the Intel transition as customers wait for the new Intel-based Macintosh systems. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 476 | In the first six months of 2006, net sales in Japan segment increased $195 million or 42% compared to the same period in 2005. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 477 | These increases were attributable to strong iPod sales, other music related products and services, Macintosh portable systems, and Mac OS X slightly offset by decreases in net sales of Macintosh desktop products. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 478 | Retail
During the second quarter of 2006, the Company opened 6 new retail stores. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 479 | The Company had 141 retail stores open at the end of the second quarter of 2006 compared to 103 stores at the end of the second quarter of 2005. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 480 | During the second quarter of 2006, the Retail segment’s net sales grew to $636 million as compared to $571 million in the second quarter of 2005, an 11% increase. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 481 | During the second quarter of 2006, average revenue per store decreased to $4.6 million from $5.6 million in the second quarter of 2005. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 482 | Net sales for the first six months of 2006 grew to $1.7 billion from $1.1 billion during the same period in 2005, a 51% increase. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 483 | During the first six months of 2006, average revenue per store increased to $12.8 million from $11.6 million in the first six months of 2005. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 484 | As measured by the Company’s operating segment reporting, the Retail segment reported operating income of $29 million and $119 million during the second quarter and first six months of 2006, respectively, as compared to operating income of $42 million and $87 million during the second quarter and first six months of 20... | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 485 | The decrease in profitability for the second quarter of 2006 was primarily due to the decline in average revenue per store. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 486 | Expansion of the Retail segment has required and will continue to require a substantial investment in fixed assets and related infrastructure, operating lease commitments, personnel, and other operating expenses. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 487 | Capital expenditures associated with the Retail segment since its inception totaled $611 million through the end of the second quarter of 2006, of which $82 million was incurred during the first six months of 2006. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 488 | As of April 1, 2006, the Retail segment had 4,851 full-time equivalent employees and had outstanding lease commitments associated with retail store space and related facilities of $782 million. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 489 | Gross Margin
Gross margin for the three and six-month periods ended April 1, 2006 and March 26, 2005 was as follows (in millions, except gross margin percentages):
Gross margin percentage remained flat at 29.8% for both the three-month periods ended April 1, 2006 and March 26, 2005. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 490 | Favorable costs of certain commodity components including LCD flat-panel displays and NAND flash memory contributed to maintaining the gross margin percentage along with higher overall revenue that provided for more effective leverage on fixed production costs. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 491 | During the first six months of 2006, gross margin percentage decreased to 28.3% compared to 29.2% during the first six months of 2005. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 492 | This was primarily due to a relative increase in sales of lower margin products in the first quarter of 2006, particularly the iPod product family and music-related services, partially offset by higher overall revenue that provided more effective leverage on fixed production costs. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 493 | Additionally, gross margin on Macintosh net sales was lower on a year-over-year basis primarily due to reductions in average selling prices from the first six months of 2005. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 494 | The Company anticipates that its gross margin and the gross margin of the overall personal computer and consumer electronics industries will remain under pressure in light of price competition, especially for the iPod product line. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 495 | The Company expects its gross margin percentage to decrease to about 28.5% in the third quarter of 2006 primarily as a result of a shift in the mix of revenue toward lower margin products as a result of the K-12 buying season, a full quarter impact of price reductions on the iPod shuffle and the introduction of the 1GB... | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 496 | The foregoing statements regarding the Company’s expected gross margin and forecasted revenue for the third quarter of 2006 are forward-looking. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 497 | Gross margin could differ from anticipated levels because of several factors, including certain of those discussed in Part II, Item 1A. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 498 | Risk Factors. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 499 | There can be no assurance that current gross margins will be maintained, targeted gross margin levels will be achieved, or current margins on existing individual products will be maintained. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 500 | Operating Expenses
Operating expenses for the three and six-month periods ended April 1, 2006 and March 26, 2005 were as follows (in millions, except for percentages):
Research and Development (R&D)
Expenditures for R&D increased 48% or $57 million to $176 million in the second quarter of 2006 compared to $119 million ... | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 501 | These increases were due primarily to an increase in R&D headcount in the current year to support expanded R&D activities, increases of $12 million and $25 million for the three and six-month periods ended April 1, 2006, respectively, in stock-based compensation expense resulting from the adoption of SFAS No. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 502 | 123R and recognized as R&D expense, and higher overall expenses due to the 14th week added to the first fiscal quarter of 2006 to realign the Company’s fiscal quarters with calendar quarters. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 503 | In addition, during the second quarter and first six months of 2005, the Company capitalized approximately $14.7 million and $29.5 million, respectively of costs associated with the development of Mac OS X Tiger. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 504 | No software development costs were capitalized during the second quarter or first six months of 2006. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 505 | Despite the increase in expenditures, R&D as a percentage of net sales remained flat in both the second quarter and first six months of 2006 as compared to the same periods of 2005 due to the significant increase of 34% and 50% in total net sales for the Company in the second quarter and first six months of 2006, respe... | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 506 | The Company continues to believe that focused investments in R&D are critical to its future growth and competitive position in the marketplace and are directly related to timely development of new and enhanced products that are central to the Company’s core business strategy. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 507 | As such, the Company expects to make further investments in R&D to remain competitive. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 508 | Selling, General, and Administrative Expense (SG&A)
Expenditures for SG&A increased $145 million or 32% and $307 million or 33%, respectively, for the three and six-month periods ended April 1, 2006, compared to the same periods in 2005. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 509 | These increases were primarily due to higher direct and channel variable selling expenses resulting from the significant year-over-year increase in total net sales for the second quarter and first six months of 2006, the Company’s continued expansion of its Retail segment in both domestic and international markets, inc... | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 510 | 123R and recognized as SG&A expense, a current year increase in discretionary spending on marketing and advertising, and the expenses associated with the 14th week added to the first fiscal quarter of 2006. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 511 | Other Income and Expense
Other income and expense for the three and six-month periods ended April 1, 2006 and March 26, 2005 were as follows (in millions):
Total other income and expense increased $43 million to $76 million during the second quarter of 2006 compared to $33 million in the second quarter of 2005, and inc... | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 512 | These increases are attributable primarily to higher cash and short-term investment balances and increasing investment yields resulting from higher market interest rates, and the 14th week added to the first fiscal quarter of 2006. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 513 | The weighted average interest rate earned by the Company on its cash, cash equivalents and short-term investments increased to 4.31% in the second quarter of 2006 compared to the 2.37% rate earned during the same period in 2005. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 514 | Provision for Income Taxes
The Company’s effective tax rate for the three and six-months ended April 1, 2006 was approximately 32%, relatively consistent with the same periods in 2005. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 515 | The Company’s effective rate for both periods differs from the statutory federal income tax rate of 35% due primarily to certain undistributed foreign earnings for which no U.S. taxes are provided because such earnings are intended to be indefinitely reinvested outside the U.S. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 516 | The Internal Revenue Service (IRS) has completed its field audit of the Company’s federal income tax returns for all years prior to 2002 and proposed certain adjustments. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 517 | Certain of these adjustments are being contested through the IRS Appeals Office. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 518 | Substantially all IRS audit issues for these years have been resolved. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 519 | In addition, the Company is subject to audits by state, local, and foreign tax authorities. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 520 | Management believes that adequate provision has been made for any adjustments that may result from tax examinations. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 521 | However, the outcome of tax audits cannot be predicted with certainty. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 522 | Should any issues addressed in the Company’s tax audits be resolved in a manner not consistent with management’s expectations, the Company could be required to adjust its provision for income tax in the period such resolution occurs. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 523 | On October 22, 2004, the American Jobs Creation Act (AJCA) was signed into law. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 524 | The AJCA includes a provision for the deduction of 85% of certain foreign earnings that are repatriated, as defined in the AJCA. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 525 | The Company may elect to apply this provision to repatriations of qualifying earnings in fiscal year 2006. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 526 | The Company is continuing to evaluate the effects of the repatriation provision and expects to complete the evaluation in fiscal year 2006. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 527 | A maximum of $755 million may be eligible for repatriation under the reduced tax rate provided by AJCA. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 528 | However, given the uncertainties and complexities of the repatriation provision and the Company’s continuing evaluation, the Company has not yet determined the amount that may be repatriated or the related potential income tax effects of such repatriation. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 529 | Recent Accounting Pronouncements
In December 2004, the Financial Accounting Standards Board (FASB) issued FASB Staff Position (FSP) 109-2, Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 530 | FSP 109-2 provides additional time to companies beyond the financial reporting period of enactment to evaluate the effects of the AJCA on their plans for repatriation of foreign earnings for purposes of applying SFAS No. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 531 | 109, Accounting for Income Taxes. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 532 | The Company is continuing to evaluate the repatriation provisions of AJCA, which if implemented by the Company would affect the Company’s tax provision and deferred tax assets and liabilities. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 533 | However, given the uncertainties and complexities of the repatriation provision and the Company’s continuing evaluation, the Company has not yet determined the amount, if any, that will be repatriated or the related potential income tax effects of such repatriation. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 534 | The Company expects to complete the evaluation in fiscal 2006. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 535 | In May 2005, the FASB issued SFAS No. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 536 | 154, Accounting Changes and Error Corrections, which replaces APB Opinion No. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 537 | 20, Accounting Changes and SFAS No. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 538 | 3, Reporting Accounting Changes in Interim Financial Statements-An Amendment of APB Opinion No. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 539 | 28. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 540 | SFAS No. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 541 | 154 requires retrospective application to prior periods’ financial statements of a voluntary change in accounting principal unless it is not practicable. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 542 | SFAS No. | 0001104659-06-031303/full-submission.txt |
0000320193 | 20060505 | 10-Q | 543 | 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005 and is required to be adopted by the Company in the first quarter of fiscal 2007. | 0001104659-06-031303/full-submission.txt |
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