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Item 6.
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Exhibits (a) Index to Exhibits Incorporated by Reference Filed/ Exhibit Number Exhibit Description Form Filing Date/ Period End Date Furnished Herewith 3.1 Restated Articles of Incorporation, filed with the Secretary of State of the State of California on January 27, 1988.
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S-3 7/27/88 3.2 Amendment to Restated Articles of Incorporation, filed with the Secretary of State of the State of California on May 4, 2000.
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10-Q 5/11/00 3.3 By-Laws of the Company, as amended through June 7, 2004.
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10-Q 6/26/04 3.4 Certificate of Amendment to Restated Articles of Incorporation, as amended, filed with the Secretary of State of the State of California on February 25, 2005.
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10-Q 6/25/05 4.9 Certificate of Determination of Preferences of Series A Non-Voting Convertible Preferred Stock of Apple Computer, Inc. 10-K 9/26/97 10.A.3 Apple Computer, Inc. Savings and Investment Plan, as amended and restated effective as of October 1, 1990.
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10-K 9/27/91 10.A.3-1 Amendment of Apple Computer, Inc. Savings and Investment Plan dated March 1, 1992.
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10-K 9/25/92 10.A.3-2 Amendment No.
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2 to the Apple Computer, Inc. Savings and Investment Plan.
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10-Q 3/28/97 10.A.5 1990 Stock Option Plan, as amended through November 5, 1997.
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10-Q 12/26/97 10.A.6 Apple Computer, Inc.
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Employee Stock Purchase Plan, as amended through April 21, 2005.
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10-Q 6/25/05 10.A.8 Form of Indemnification Agreement between the Registrant and each officer of the Registrant.
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10-K 9/26/97 10.A.43 NeXT Computer, Inc. 1990 Stock Option Plan, as amended.
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S-8 3/21/97 10.A.49 1997 Employee Stock Option Plan, as amended through October 19, 2001.
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10-K 9/28/02 10.A.50 1997 Director Stock Option Plan.
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10-Q 3/27/98 10.A.51 2003 Employee Stock Plan, as amended through November 9, 2005.
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10-K 9/24/05 10.A.52 Reimbursement Agreement dated as of May 25, 2001 by and between the Registrant and Steven P. Jobs.
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10-Q 6/29/02 10.A.53 Option Cancellation and Restricted Stock Award 10-Q 6/28/03 Agreement dated as of March 19, 2003 by and between the Registrant and Steven P. Jobs.
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10.A.54 Form of Restricted Stock Unit Award Agreement.
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10-Q 3/27/04 10.A.54-1 Alternative Form of Restricted Stock Unit Award Agreement.
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10-K 9/24/05 10.A.55 Apple Computer, Inc.
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Performance Bonus Plan dated April 21, 2005.
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10-Q 6/25/05 10.A.56 Form of Election to Satisfy Tax Withholding with Stock.
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8-K 8/15/05 10.A.57 Form of Option Agreement.
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10-K 9/24/05 10.B.18* Custom Sales Agreement effective October 21, 2002 between the Registrant and International Business Machines Corporation.
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10-K 9/27/03 10.B.19* Purchase Agreement effective August 10, 2005 between the Registrant and Freescale Semiconductor, Inc. 10-K 9/24/05 10.B.20** Consulting Agreement dated as of April 17, 2006 by and between the Registrant and J.R. Ruby Consulting Corp. X 14.1 Code of Ethics of the Company.
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10-K 9/27/03 31.1** Rule13a-14(a) / 15d-14(a) Certification of Chief Executive Officer.
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X 31.2** Rule13a-14(a) / 15d-14(a) Certification of Chief Financial Officer.
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X 32.1*** Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer.
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X * Confidential treatment requested as to certain portion of this exhibit.
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** Filed herewith.
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*** Furnished herewith.
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SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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December 29, APPLE COMPUTER, INC. By: /s/ Peter Oppenheimer Peter Oppenheimer Senior Vice President and Chief Financial Officer
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10-Q a07-2749_110q.htm 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 30, 2006 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF TH...
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Employer Identification No.)
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of incorporation or organization) Infinite Loop Cupertino, California (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: (408) 996-1010 Apple Computer, Inc. (Former name or former address, if changed since last report.)
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requiremen...
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Yes x No o Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.
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See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer x Accelerated filer o Non-accelerated filer o Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
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Yes o No x 861,874,894 shares of common stock issued and outstanding as of January 24, 2007 PART I.
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FINANCIAL INFORMATION Item 1.
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Financial Statements APPLE INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in millions, except share and per share amounts) See accompanying Notes to Condensed Consolidated Financial Statements.
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APPLE INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in millions, except share amounts) See accompanying Notes to Condensed Consolidated Financial Statements.
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APPLE INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in millions) See accompanying Notes to Condensed Consolidated Financial Statements.
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Apple Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) Note 1 - Summary of Significant Accounting Policies Apple Inc. (formerly Apple Computer, Inc.) and its wholly-owned subsidiaries (“Apple” or the “Company”) designs, manufactures, and markets personal computers and related software, services, pe...
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The Company also designs, develops, and markets a line of portable digital music players along with related accessories and services including the online sale of third-party audio and video products.
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The Company sells its products worldwide through its online stores, its retail stores, its direct sales force, and third-party wholesalers, resellers, and value-added resellers.
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In addition, the Company sells a variety of third-party Macintosh and iPod compatible products including application software, printers, storage devices, speakers, headphones, and various other accessories and supplies through its online and retail stores.
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The Company sells to education, consumer, creative professional, business, and government customers.
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Basis of Presentation and Preparation The accompanying condensed consolidated financial statements include the accounts of the Company.
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Intercompany accounts and transactions have been eliminated.
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The preparation of these condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in these condensed consolidated financial statements and accompanying notes.
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Actual results could differ materially from those estimates.
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These condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s annual consolidated financial statements and the notes thereto for the fiscal year ended September 30, 2006, included in its Annual Report on Form 10-K for the year ended September 30, 2006 (the “20...
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The Company’s fiscal year is the 52 or 53-week period that ends on the last Saturday of September.
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The Company’s first quarter of fiscal year 2007 contained 13 weeks and the first quarter of its fiscal year 2006 contained 14 weeks.
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The Company’s fiscal year 2007 will end on September 29, 2007 and include 52 weeks while fiscal year 2006 included 53 weeks.
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Unless otherwise stated, references to particular years or quarters refer to the Company’s fiscal years ended in September and the associated quarters of those fiscal years.
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Earnings Per Common Share Basic earnings per common share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period.
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Diluted earnings per common share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the dilutive potential shares ...
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The dilutive effect of outstanding options, shares to be purchased under the employee stock purchase plan, unvested restricted stock and restricted stock units (“RSUs”) is reflected in diluted earnings per share by application of the treasury stock method.
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Under the treasury stock method, an increase in the fair market value of the Company’s common stock can result in a greater dilutive effect from outstanding options, restricted stock, and RSUs.
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Additionally, the exercise of employee stock options and the vesting of restricted stock and RSUs can result in a greater dilutive effect on earnings per share.
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The following table sets forth the computation of basic and diluted earnings per share (in thousands, except net income and per share amounts): Potentially dilutive securities representing approximately 13.9 million and 2.9 million shares of common stock for the quarter ended December 30, 2006 and December 31, 2005, re...
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Potentially dilutive securities include stock options and RSUs.
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Note 2 - Financial Instruments Cash, Cash Equivalents and Short-Term Investments The following table summarizes the fair value of the Company’s cash and available-for-sale securities held in its short-term investment portfolio, recorded as cash and cash equivalents or short-term investments as of December 30, 2006, and...
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Foreign securities consist primarily of foreign commercial paper, certificates of deposit, and time deposits with foreign institutions, most of which are denominated in U.S. dollars.
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The Company had net unrealized losses totaling $441,000 on its investment portfolio, primarily related to investments with stated maturities less than one year, as of December 30, 2006, and net unrealized losses totaling $687,000 on its investment portfolio, primarily related to investments with stated maturities less ...
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As of December 30, 2006 and September 30, 2006, approximately $1.2 billion and $921 million, respectively, of the Company’s short-term investments had underlying maturities ranging from one to five years.
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The remaining short-term investments had maturities less than 12 months.
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The following table shows the gross unrealized losses and fair value for those investments that were in an unrealized loss position as of December 30, 2006 and September 30, 2006, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in millions): T...
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The Company typically invests in highly-rated securities with low probabilities of default.
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The Company’s investment policy requires investments to be rated single-A or better.
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Therefore, the Company considers the declines to be temporary in nature.
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As of December 30, 2006, the Company does not consider the investments to be other-than-temporarily impaired.
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Market values were determined for each individual security in the investment portfolio.
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When evaluating the investments for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below cost basis, the financial condition of the issuer, and the Company’s ability and intent to hold the investment for a period of time, which may be suff...
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Derivative Financial Instruments The Company uses derivatives to partially offset its business exposure to foreign exchange risk.
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Foreign currency forward and option contracts are used to offset the foreign exchange risk on certain existing assets and liabilities and to hedge the foreign exchange risk on expected future cash flows on certain forecasted revenue and cost of sales.
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Generally, the Company’s practice is to hedge a majority of its existing material foreign exchange transaction exposures.
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However, the Company may not hedge certain foreign exchange transaction exposures due to immateriality, prohibitive economic cost of hedging particular exposures, or limited availability of appropriate hedging instruments.
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The Company’s accounting policies for these instruments are based on whether the instruments are designated as hedge or non-hedge instruments.
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The Company records all derivatives on the balance sheet at fair value.
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Derivatives that are not hedges are adjusted to fair value through earnings.
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If the derivative is a hedge, depending on the nature of the hedge, changes in fair value will either be offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings, or recognized in other comprehensive income until the hedged item is recognized in earnings.
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As of December 30, 2006, the Company had a net deferred loss associated with cash flow hedges of approximately $4 million net of taxes, all of which is expected to be reclassified to earnings by the end of the third quarter of 2007.
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As of the end of the first quarter of 2007, the general nature of the Company’s risk management activities and the general nature and mix of the Company’s derivative financial instruments have not changed materially from the end of 2006.
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Note 3 - Condensed Consolidated Financial Statement Details (in millions) Other Current Assets Property, Plant, and Equipment Other Assets Accrued Expenses Non-Current Liabilities Other Income and Expense Note 4 - Shareholders’ Equity Preferred Stock The Company has 5 million shares of authorized preferred stock, none ...
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Under the terms of the Company’s Restated Articles of Incorporation, the Board of Directors is authorized to determine or alter the rights, preferences, privileges and restrictions of the Company’s authorized but unissued shares of preferred stock.
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Restricted Stock Units The Company’s Board of Directors has granted RSUs to members of the Company’s senior management team, excluding its CEO.
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These RSUs generally vest over four years either at the end of the four-year service period, in two equal installments on the second and fourth anniversaries of the date of grant, or in equal installments on each of the first through fourth anniversaries of the grant date.
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Upon vesting, the RSUs will convert into an equivalent number of shares of common stock.
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The amounts of the RSUs expensed by the Company are based on the closing market price of the Company’s common stock on the date of grant and are amortized on a straight-line basis over the requisite service period.
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The RSUs have been reflected in the calculation of diluted earnings per share utilizing the treasury stock method.
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Comprehensive Income Comprehensive income consists of two components, net income and other comprehensive income.
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Other comprehensive income refers to revenue, expenses, gains, and losses that under U.S. generally accepted accounting principles are recorded as an element of shareholders’ equity but are excluded from net income.
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The Company’s other comprehensive income consists of foreign currency translation adjustments from those subsidiaries not using the U.S. dollar as their functional currency, unrealized gains and losses on marketable securities categorized as available-for-sale, and net deferred gains and losses on certain derivative in...
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