cik stringclasses 1
value | date stringlengths 8 8 | form stringclasses 4
values | sentenceCount int64 0 2.33k | sentence stringlengths 2 5.25k | filename stringlengths 40 40 |
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0000320193 | 20041203 | 10-K | 511 | In 2003, settlement of the Company's forward stock purchase agreement resulted in a gain of $6 million. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 512 | Favorable cumulative-effect type adjustments, net of taxes, of $1 million and $12 million were recognized in 2003 and 2001, respectively. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 513 | Item 7. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 514 | Management's Discussion and Analysis of Financial Condition and Results of Operations
This section and other parts of this Form 10-K contain forward-looking statements that involve risks and uncertainties. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 515 | Forward-looking statements can also be identified by words such as "anticipates," "expects," "believes," "plans," "predicts," and similar terms. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 516 | Forward-looking statements are not guarantees of future performance and the Company's actual results may differ significantly from the results discussed in the forward-looking statements. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 517 | Factors that might cause such differences include, but are not limited to, those discussed in the subsection entitled "Factors That May Affect Future Results and Financial Condition" below. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 518 | The following discussion should be read in conjunction with the consolidated financial statements and notes thereto included in Item 8 of this Form 10-K. All information presented herein is based on the Company's fiscal calendar. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 519 | The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 520 | Executive Overview
Apple designs, manufactures and markets personal computers and related software, services, peripherals and networking solutions. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 521 | The Company also designs, develops and markets a line of portable digital music
players along with related accessories and services including the online distribution of third-party music and audio books. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 522 | The Company's products and services include the Macintosh line of desktop and notebook computers, the iPod digital music player, the Xserve server and Xserve RAID storage products, a portfolio of consumer and professional software applications, the Mac OS X operating system, the online iTunes Music Store, a portfolio o... | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 523 | The Company sells its products worldwide through its online stores, its own retail stores, its direct sales force, and third-party wholesalers, resellers and value added resellers. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 524 | In addition, the Company sells a variety of third-party Macintosh compatible products, including computer printers and printing supplies, storage devices, computer memory, digital video and still cameras, personal digital assistants, and various other computing products and supplies through its online and retail stores... | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 525 | The Company sells to education, consumer, creative professional, business and government customers. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 526 | A further description of the Company's products may be found in Part I, Item 1 of this document under the heading "Business." | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 527 | The Company's business strategy leverages its unique ability, through the design and development of its own operating system, hardware and many software applications and technologies, to bring to its customers around the world compelling new products and solutions with superior ease-of-use, seamless integration and inn... | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 528 | The Company participates in several highly competitive markets, including personal computers with its Macintosh line of computers, consumer electronics with its iPod line of digital music players and distribution of third-party digital music through its online iTunes Music Store. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 529 | While the Company is widely recognized as an innovator in the personal computer market as well as a leader in the emerging market for distribution of digital music, these are highly competitive markets that are subject to aggressive pricing and increased competition. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 530 | In order to remain competitive, the Company believes that increased investment in research and development (R&D) is necessary in order to maintain and extend its position in the markets where it competes. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 531 | The Company's R&D spending is focused on delivering timely updates and enhancements to its existing line of personal computers, displays, operating systems, software applications and portable music players; developing new digital lifestyle consumer and professional software applications; and investing in new product ar... | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 532 | The Company utilizes a variety of direct and indirect distribution channels. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 533 | The Company believes that sales of its innovative and differentiated products are enhanced by knowledgeable salespersons who can convey the value of the hardware, software and peripheral integration, demonstrate the unique digital lifestyle solutions that are available only on Macintosh computers, and demonstrate the s... | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 534 | The Company further believes that providing a high-quality sales and after-sales support experience is critical to attracting and retaining customers. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 535 | To ensure a high-quality buying experience for its products in which service and education are emphasized, the Company has expanded and improved its distribution capabilities by opening its own retail stores in the U.S. and internationally. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 536 | The Company had 86 stores open as of September 25, 2004. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 537 | The Company has also staffed selected third-party stores with the Company's own employees to improve the buying experience through reseller channels. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 538 | The Company has deployed Apple employees in reseller locations around the world including the U.S., Europe, Japan and Australia. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 539 | The Company also sells to customers direct through one of its online stores around the world. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 540 | To improve the accessibility of its iPod product line, the Company has significantly expanded the number of distribution points where iPods are sold. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 541 | The iPod product line can now be purchased in department stores, discount stores and specialty music and audio-visual stores. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 542 | Critical Accounting Policies and Estimates
The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles and the Company's discussion and analysis of its financial condition and results of operations require the Company's management to make judgments, a... | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 543 | Note 1 of the Notes to Consolidated Financial Statements of this Form 10-K describes the significant accounting policies and methods used in the preparation of the Company's consolidated financial statements. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 544 | Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 545 | Actual results may differ from these estimates and such differences may be material. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 546 | Management believes the Company's critical accounting policies and estimates are those related to revenue recognition, allowance for doubtful accounts, inventory valuation and exposures related to inventory purchase commitments, valuation of long-lived assets including acquired intangibles, warranty costs, and income t... | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 547 | Management believes these policies to be critical because they are both important to the portrayal of the Company's financial condition and results, and they require management to make judgments and estimates about matters that are inherently uncertain. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 548 | The Company's senior management has reviewed these critical accounting policies and related disclosures with the Audit and Finance Committee of the Company's Board of Directors. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 549 | Revenue Recognition
Net sales consist primarily of revenue from the sale of products (i.e., hardware, software, and peripherals), and extended warranty and support contracts. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 550 | The Company recognizes revenue pursuant to applicable accounting standards, including Statement of Position (SOP) No. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 551 | 97-2, Software Revenue Recognition, as amended, and Securities and Exchange Commission (SEC) Staff Accounting Bulletin (SAB) No. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 552 | 104, Revenue Recognition. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 553 | The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collection is probable. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 554 | Product is considered delivered to the customer once it has been shipped, and title and risk of loss have been transferred. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 555 | For most of the Company's product sales, these criteria are met at the time the product is shipped. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 556 | For online sales to individuals, for some sales to education customers in the U.S., and for certain other sales, the Company defers revenue until the customer receives the product because the Company legally retains a portion of the risk of loss on these sales during transit. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 557 | If at the outset of an arrangement the Company determines the arrangement fee is not, or is presumed not to be, fixed or determinable, revenue is deferred and subsequently recognized as amounts become due and payable. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 558 | The Company records reductions to revenue for estimated commitments related to price protection and for customer incentive programs, including reseller and end-user rebates, and other sales programs and volume-based incentives. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 559 | The estimated cost of these programs is accrued as a reduction to revenue in the period the Company has sold the product and committed to a plan. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 560 | The Company also records reductions to revenue for expected future product returns based on the Company's historical experience. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 561 | Future market conditions and product transitions may require the Company to increase customer incentive programs and incur incremental price protection obligations that could result in additional reductions to revenue at the time such programs are offered. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 562 | Additionally, certain customer incentive programs require management to estimate the number of customers who will actually redeem the incentive based on historical experience and the specific terms and conditions of particular incentive programs. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 563 | If a greater than estimated proportion of customers redeem such incentives, the Company would be required to record additional reductions to revenue, which could have a material adverse impact on the Company's results of operations. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 564 | Allowance for Doubtful Accounts
The Company distributes its products through third-party resellers and directly to certain education, consumer, and commercial customers. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 565 | The Company generally does not require collateral from its customers. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 566 | However, when possible the Company does attempt to limit credit risk on trade receivables with credit insurance for certain customers in Latin America, Europe and Asia and by arranging with third-party financing companies to provide flooring arrangements and other loan and lease programs to the Company's direct custome... | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 567 | These credit-financing arrangements are directly between the third-party financing company and the end customer. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 568 | As such, the Company generally does not assume any recourse or credit risk sharing related to any of these arrangements. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 569 | However, considerable trade receivables that are not covered by collateral, third-party flooring arrangements, or credit insurance are outstanding with the Company's distribution and retail channel partners. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 570 | The allowance for doubtful accounts is based on management's assessment of the collectibility of specific customer accounts and includes consideration of the credit worthiness and financial condition of those specific customers. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 571 | The Company records an allowance to reduce the specific receivables to the amount that is reasonably believed to be collectible. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 572 | The Company also records an allowance for all other trade receivables based on multiple factors including historical experience with bad debts, the general economic environment, the financial condition of the Company's distribution channels, and the aging of such receivables. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 573 | If there is a deterioration of a major customer's financial condition, if the Company becomes aware of additional information related to the credit worthiness of a major customer, or if future actual default rates on trade receivables in general differ from those currently anticipated, the Company may have to adjust it... | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 574 | Inventory Valuation and Inventory Purchase Commitments
The Company must order components for its products and build inventory in advance of product shipments. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 575 | The Company records a write-down for inventories of components and products, including third-party products held for resale, which have become obsolete or are in excess of anticipated demand or net realizable value. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 576 | The Company performs a detailed review of inventory each period that considers multiple factors including demand forecasts, product life cycle status, product development plans, current sales levels, and component cost trends. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 577 | The personal computer industry is subject to a rapid and unpredictable pace of product and component obsolescence and demand changes. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 578 | If future demand or market conditions for the Company's products are less favorable than forecasted or if unforeseen technological changes negatively impact the utility of component inventory, the Company may be required to record additional write-downs which would negatively affect gross margins in the period when the... | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 579 | The Company accrues necessary reserves for cancellation fees related to component orders that have been cancelled. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 580 | Consistent with industry practice, the Company acquires components through a combination of formal purchase orders, supplier contracts, and open orders based on projected demand information. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 581 | These commitments typically cover the Company's requirements for periods ranging from 30 to 130 days. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 582 | If there is an abrupt and substantial decline in demand for one or more of the Company's products or an unanticipated change in technological requirements for any of the Company's products, the Company may be required to record additional reserves for cancellation fees that would negatively affect gross margins in the ... | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 583 | Valuation of Long-Lived Assets Including Acquired Intangibles
The Company reviews property, plant, and equipment and certain identifiable intangible assets for impairment when events or changes in circumstances indicate the carrying amount of such an asset may not be recoverable. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 584 | Recoverability of these assets is measured by comparison of their carrying amount to future undiscounted cash flows the assets are expected to generate. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 585 | If such assets are considered to be impaired, the impairment to be recognized in earnings equals the amount by which the carrying value of
the assets exceeds their fair market value. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 586 | Although the Company has recognized no material impairment adjustments related to its property, plant, and equipment or identifiable intangibles during the past three fiscal years, except those made in conjunction with restructuring actions, deterioration in the Company's business in a geographic region or business seg... | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 587 | In accordance with Statement of Financial Accounting Standards (SFAS) No. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 588 | 142, Goodwill and Other Intangible Assets, the Company performs a review of goodwill for impairment annually, or earlier if indicators of potential impairment exist. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 589 | The review of goodwill for potential impairment is highly subjective and requires that: (1) goodwill be allocated to various reporting units of the Company's business to which it relates; (2) the Company estimate the fair value of those reporting units to which the goodwill relates; and (3) the Company determine the bo... | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 590 | If the estimated fair value of reporting units with allocated goodwill is determined to be less than their book value, the Company is required to estimate the fair value of all identifiable assets and liabilities of those reporting units in a manner similar to a purchase price allocation for an acquired business. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 591 | This requires independent valuation of certain internally developed and unrecognized assets including in-process research and development and developed technology. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 592 | Once this process is complete, the amount of goodwill impairment, if any, can be determined. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 593 | Based on the Company's estimates as of September 25, 2004 there was no impairment of goodwill. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 594 | However, changes in various circumstances including changes in the Company's market capitalization, changes in the Company's forecasts, and changes in the Company's internal business structure could cause one or more of the Company's reporting units to be valued differently thereby causing an impairment of goodwill. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 595 | Additionally, in response to changes in the personal computer industry and changes in global or regional economic conditions, the Company may strategically realign its resources and consider restructuring, disposing, or otherwise exiting businesses, which could result in an impairment of property, plant, and equipment,... | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 596 | Warranty Costs
The Company provides currently for the estimated cost for product warranties at the time the related revenue is recognized based on historical and projected warranty claim rates, historical and projected cost-per-claim, and knowledge of specific product failures that are outside of the Company's typical ... | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 597 | Each quarter, the Company reevaluates its estimates to assess the adequacy of its recorded warranty liabilities considering the size of the installed base of products subject to warranty protection, and adjusts the amounts as necessary. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 598 | If actual product failure rates or repair costs differ from estimates, revisions to the estimated warranty liability would be required and could negatively affect the Company's results of operations. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 599 | Income Taxes
The Company records a tax provision for the anticipated tax consequences of the reported results of operations. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 600 | In accordance with SFAS No. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 601 | 109, Accounting for Income Taxes, the provision for income taxes is computed using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and... | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 602 | Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 603 | The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 604 | Management believes it is more likely than not that forecasted income, including income that may be generated as a result of certain tax planning strategies, together with the tax effects of the deferred tax
liabilities, will be sufficient to fully recover the remaining deferred tax assets. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 605 | In the event that all or part of the net deferred tax assets are determined not to be realizable in the future, an adjustment to the valuation allowance would be charged to earnings in the period such determination is made. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 606 | Similarly, if the Company subsequently realizes deferred tax assets that were previously determined to be unrealizable, the respective valuation allowance would be reversed, resulting in a positive adjustment to earnings or a decrease in goodwill in the period such determination is made. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 607 | In addition, the calculation of tax liabilities involves significant judgment in estimating the impact of uncertainties in the application of complex tax laws. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 608 | Resolution of these uncertainties in a manner inconsistent with management's expectations could have a material impact on the Company's results of operations and financial position. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 609 | Net Sales
Net sales and Macintosh unit sales by operating segment and net sales and unit sales by product follow (net sales in millions and Macintosh unit sales in thousands):
Notes:
(a)Other Segments include Asia Pacific and FileMaker. | 0001047469-04-035975/full-submission.txt |
0000320193 | 20041203 | 10-K | 610 | (b)Includes Xserve product line. | 0001047469-04-035975/full-submission.txt |
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