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APPLE INC
FORM 10-K405
(Annual Report (Regulation S-K, item 405))
Filed 12/23/98 for the Period Ending 09/25/98
Address ONE INFINITE LOOP
CUPERTINO, CA 95014
Telephone (408) 996-1010
CIK 0000320193
Symbol AAPL
SIC Code 3571 - Electronic Computers
Industry Computer Hardware
Sector Technology
Fiscal Year 09/30
http://www.edgar-online.com
© Copyright 2011, EDGAR Online, Inc. All Rights Reserved.
Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.

Table of contents

  • Page 1
    APPLE INC FORM 10-K405 (Annual Report (Regulation S-K, item 405)) Filed 12/23/98 for the Period Ending 09/25/98 Address Telephone CIK Symbol SIC Code Industry Sector Fiscal Year ONE INFINITE LOOP CUPERTINO, CA 95014 (408) 996-1010 0000320193 AAPL 3571 - Electronic Computers Computer Hardware ...

  • Page 2
    ... The aggregate market value of voting stock held by nonaffiliates of the Registrant was approximately $4,003,770,634 as of December 11, 1998, based upon the closing price on the Nasdaq National Market reported for such date. Shares of Common Stock held by each executive officer and director and by...

  • Page 3
    ... of Apple networking software, Power Macintosh G3 systems can be used as workgroup servers. IMAC Introduced in August 1998, iMac is targeted at the education and consumer markets. With an innovative industrial design, easy internet access and a powerful PowerPC G3 microprocessor, iMac is suitable...

  • Page 4
    ... Inc. ("NeXT") which the Company acquired in 1997. The Company also develops and distributes extensions to the Macintosh system software, such as utilities, languages and developer tools. The Company continues to develop QuickTime, its market-leading cross platform digital media technology. With the...

  • Page 5
    ... began selling many of its products directly to end users in the U.S. through the Company's on-line store. Throughout fiscal 1998, the Company revised its distribution channel model and related policies. As a result, the Company has significantly reduced the number of its distributors, authorized...

  • Page 6
    ... systems. In addition, the Company has registered, and/or has applied to register, trademarks in the U.S. and a number of foreign countries for "Apple", the Apple silhouette logo, the Apple color logo, "Macintosh", and numerous other product trademarks. In 1986, the Company acquired ownership...

  • Page 7
    ... or financial performance. WARRANTY The Company offers a parts and labor limited warranty on its hardware products. The warranty period is typically one year from the date of purchase by the end user. The Company also offers a 90-day warranty for Apple service parts used to repair Apple hardware...

  • Page 8
    ... of competitive products to the marketplace. The Company continues to develop new products and technologies and to enhance existing products in the areas of hardware and peripherals, system software, networking and communications, and the Internet. The Company's research and development expenditures...

  • Page 9
    ... it has adequate manufacturing capacity for the foreseeable future. The Company continues to make investments in capital equipment as needed to meet anticipated demand for its products. Information regarding critical business operations that are located near major earthquake faults is set forth in...

  • Page 10
    ... COMMON EQUITY AND RELATED SHAREHOLDER MATTERS The Company's common stock is traded on the over-the-counter market and is quoted on the Nasdaq National Market under the symbol AAPL, on the Tokyo Stock Exchange under the symbol APPLE, and on the Frankfurt Stock Exchange under the symbol APCD. Options...

  • Page 11
    ... sales...Research and development...Percentage of net sales...Selling, general and administrative...Percentage of net sales...Special charges: In-process research and development...Percentage of net sales...Restructuring costs...Percentage of net sales...Termination of license agreement...Percentage...

  • Page 12
    ... inventory management and actions taken to simplify and focus the Company's product line. Third, the Company made changes to its distribution channel policies which further contributed to the decline in selling, general and administrative expenses and the increased gross margin. Despite the return...

  • Page 13
    ... attributable to introduction by the Company of the iMac, a moderately priced Macintosh system designed for the education and consumer markets. Sales of iMac accounted for 33% or 278,000 of the total Macintosh units shipped in the fourth quarter. While the Company did experience year-over-year...

  • Page 14
    ... systems and newer PowerBook G3 systems, the low volume of lower margin consumer products shipped during the first three quarters of 1998, and the declining cost of various components of the Company's products, particularly those sourced from Asia. Improvements in the Company's inventory management...

  • Page 15
    ... ability to effectively manage quality problems and warranty costs and to stimulate demand for certain of its products. The Company's operating strategy and pricing take into account anticipated changes in foreign currency exchange rates over time; however, the Company's results of operations can be...

  • Page 16
    ... $7 million of purchased in-process research and development, which was charged to operations upon acquisition. In February 1997, the Company acquired all of the outstanding shares of NeXT Software, Inc. (NeXT). NeXT had developed, marketed, and supported software that enables customers to implement...

  • Page 17
    ... future unrealized gains and losses reported as a component of shareholders' equity. Subsequent to the sale of shares, on October 14, 1998, the carrying value of the Company's investment in ARM was approximately $17 million, and the fair value, based on listed market quotes, was approximately $135...

  • Page 18
    ...net...Inventory...Working capital...Days sales in accounts receivable (a)...Days of supply in inventory (b)...Operating cash flow... (a) Based on ending net trade receivables and most recent quarterly net sales for each period (b) Based on ending inventory and most recent quarterly cost of sales for...

  • Page 19
    ...to the Executive Vice President and Chief Financial Officer, the Steering Committee, and the Audit and Finance Committee of the Board of Directors. The PMO developed and manages the Company's worldwide strategic plan ("Y2K Plan") to address the potential impact of Y2K on the Company's operations and...

  • Page 20
    ... and hardware) used with it properly exchange date data with it. A Y2K compliant product will recognize the Year 2000 as a leap year. THIRD PARTY RELATIONSHIPS The Company's business operations are heavily dependent on third party corporate service vendors, materials suppliers, outsourced operations...

  • Page 21
    ...the second fiscal quarter of 1999. The Company anticipates that this Phase will be completed during the fourth quarter of fiscal 1999. COST TO ADDRESS Y2K The costs of the Y2K program are primarily costs associated with the utilization of existing internal resources and incremental external spending...

  • Page 22
    ... changes in production schedules in order to respond to changing market conditions. As part of its restructuring plan, the Company also significantly reduced the number of its wholesale and retail channel partners, particularly in the Americas, which places a greater volume of sales through fewer...

  • Page 23
    ...Company. The Company plans to continue to introduce major upgrades to the current Mac OS and later introduce a new operating system, Mac OS X, which is expected to offer advanced functionality based on Apple and NeXT software technologies. It is uncertain whether Mac OS X will gain developer support...

  • Page 24
    ...-party application software for the Company's hardware products depends in part on third-party developers' perception and analysis of the relative benefits of developing, maintaining, and upgrading such software for the Company's products versus software for the larger Windows market. This analysis...

  • Page 25
    ... increased costs could decrease the Company's net sales and adversely affect the Company's consolidated operating results and financial condition. The Company's ability to produce and market competitive products is also dependent on the ability and desire of IBM and Motorola, the sole suppliers of...

  • Page 26
    ... Financial Statements at Note 10 under the subheading "Concentrations in the Available Sources of Supply of Materials and Product," which information is hereby incorporated by reference. MARKETING AND DISTRIBUTION Currently, the Company distributes its products through wholesalers, resellers...

  • Page 27
    ... the Company's foreign exchange and interest rate hedge positions, as well as to monitor the risks and opportunities of the nonhedge portfolios, the Company continually monitors its foreign exchange forward and option positions, and its interest rate swap, option and floor positions both on a stand...

  • Page 28
    ...financial instruments. The Company places its investments with high credit quality issuers and, by policy, limits the amount of credit exposure to any one issuer. The Company's general policy is to limit the risk of principal loss and ensure the safety of invested funds by limiting market and credit...

  • Page 29
    ... contracts that are intended to reduce the cost of the interest rate risk management program. The Company does not hold or transact in such financial instruments for purposes other than risk management. The interest rate swaps which qualify as accounting hedges generally require the Company to pay...

  • Page 30
    ..., changes in exchange rates, and in particular a strengthening of the U.S. dollar, may negatively affect the Company's consolidated sales and gross margins as expressed in U.S. dollars. The Company enters into foreign exchange forward and option contracts with financial institutions primarily to...

  • Page 31
    ... strike prices Foreign currency spot/forward contracts: Japanese Yen...British Pound Sterling...German Marks...Miscellaneous other currencies...Total currency spot/forward contracts... NOTIONAL AMOUNT ----------98 10 138 49 295 8 Estimated fair value... Foreign currency purchased call options...

  • Page 32
    ...Statements of Shareholders' Equity for the three fiscal years ended September 25, 1998...Consolidated Statements of Cash Flows for the three fiscal years ended September 25, 1998...Notes to Consolidated Financial Statements...Selected Quarterly Financial Information (Unaudited)...Financial Statement...

  • Page 33
    ... AUDITORS The Board of Directors Apple Computer, Inc.: We have audited the accompanying consolidated balance sheets of Apple Computer, Inc. and subsidiaries as of September 25, 1998 and September 26, 1997, and the related consolidated statements of operations, shareholders' equity and cash...

  • Page 34
    REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS The Shareholders and Board of Directors of Apple Computer, Inc. We have audited the accompanying consolidated of statements of operations, shareholders' equity, and cash flows of Apple Computer, Inc. for the year ended September 27, 1996. Our audit ...

  • Page 35
    ... 259 234 --------3,424 486 323 --------$ 4,233 LIABILITIES AND SHAREHOLDERS' EQUITY: Current liabilities: Notes payable to banks...Accounts payable...Accrued expenses...Total current liabilities...Long-term debt...Deferred tax liabilities...Total liabilities... $ -- $ 719 801 --------1,520 954...

  • Page 36
    ... SHARE AMOUNTS) THREE FISCAL YEARS ENDED SEPTEMBER 25, 1998 Net sales...Cost of sales...Gross margin...Operating expenses: Research and development...Selling, general, and administrative...Special charges: In-process research and development...Restructuring costs...Termination of license agreement...

  • Page 37
    ...----TOTAL SHAREHOLDERS' EQUITY --------150 --------- 4,159 135,193 80 14 ------633 --------- ---309 898 --(2 39 $ Balances as of September 29, 1995...Common stock issued under stock option and purchase plans, including related tax benefits...Cash dividends of $0.12 per common share...

  • Page 38
    ... with the acquisition of certain assets of PCC...Tax benefit related to disqualifying dispositions of stock options...Accumulated translation adjustment...Net income...Balances as of September 25, 1998... 41 80 14 (2) 309 1,642 See accompanying notes to consolidated financial statements. 35

  • Page 39
    ... equipment...Gains arising from equity investment...In-process research and development...Changes in operating assets and liabilities, net of effects of the acquisition of NeXT: Accounts receivable...Inventories...Other current assets...Other assets...Accounts payable...Accrued restructuring costs...

  • Page 40
    ...enter into interest rate contracts that are intended to reduce the cost of the interest rate risk management program. The Company enters into foreign exchange forward and option contracts with financial institutions primarily to protect against currency exchange risks associated with existing assets...

  • Page 41
    ... Japan), Canada, and Australia. The Company purchases foreign exchange option contracts to hedge the currency exchange risks associated with these probable but not firmly committed transactions. The Company also sells foreign exchange option contracts, in order to partially finance the purchase...

  • Page 42
    ... in the consolidated results of operations and are immaterial. REVENUE RECOGNITION The Company recognizes revenue at the time products are shipped. Provisions are made currently for estimated product returns, price protection, rebates, and other sales programs that may occur. Historically, actual...

  • Page 43
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) WARRANTY EXPENSE The Company provides currently for the estimated cost that may be incurred under product warranties when products are shipped. ADVERTISING COSTS Advertising costs ...

  • Page 44
    ..., "Reporting Comprehensive Income" and SFAS No. 131, "Disclosures About Segments of an Enterprise and Related Information", in fiscal 1999. Both statements will require additional disclosure but will not have a material impact on the Company's consolidated results of operations or financial position...

  • Page 45
    ... The Company is still in the process of assessing the impact that the Statement will have on the Company's results of operations, consolidated financial position, and operating policies. In October 1997, the American Institute of Certified Public Accountants (AICPA) issued Statement of Position (SOP...

  • Page 46
    ... rates at each respective date. The Company's exposure to credit loss and market risk will vary over time as a function of interest rates and currency exchange rates. The estimates of fair value are based on applicable and commonly used pricing models using prevailing financial market information...

  • Page 47
    ...as of September 26, 1997. Interest rate collars limit the Company's exposure to fluctuations in short-term interest rates by locking in a range of interest rates. An interest rate collar is a no-cost structure that consists of a purchased option and a sold option. The Company receives a payment when...

  • Page 48
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE 2--FINANCIAL INSTRUMENTS (CONTINUED) The $100 million interest rate swap not qualifying as an accounting hedge held as of September 26, 1997, required the Company to pay Japanese yen at a fixed 0.6% interest rate and receive Japanese yen at...

  • Page 49
    ... of shareholders' equity. Subsequent to the sale of shares on October 14, 1998, the carrying value of the Company's investment in ARM was approximately $16.9 million, and the fair value, based on listed market quotes, was approximately $135 million. The Company is subject to a "lock-up" agreement...

  • Page 50
    ... 99 205 132 31 334 --------$ 801 1997 --------$ 99 278 128 180 423 --------$ 1,108 Accrued compensation and employee benefits...Accrued marketing and distribution...Accrued warranty and related costs...Accrued restructuring costs...Other current liabilities...Total accrued expenses... INTEREST...

  • Page 51
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE 4--SPECIAL CHARGES RESTRUCTURING OF OPERATIONS In the second quarter of 1996, the Company announced and began to implement a restructuring plan aimed at reducing costs and returning the Company to profitability. The restructuring plan was ...

  • Page 52
    ... of purchased in-process research and development, which was charged to operations upon acquisition. TERMINATION OF LICENSE AGREEMENT In August 1997, the Company agreed to acquire certain assets of Power Computing Corporation (PCC), a licensed distributor of the Mac OS operating system, including...

  • Page 53
    ...TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE 5--INCOME TAXES The provision (benefit) for income taxes consisted of the following (in millions): 1998 --------Federal: Current...Deferred 11 9 --------20 --------$ 20 1997 1996 --------$ (125) (279) --------(404) --------(2) (71) --------(73...

  • Page 54
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE 5--INCOME TAXES (CONTINUED) As of September 25, 1998, and September 26, 1997, the significant components of the Company's deferred tax assets and liabilities were (in millions): SEPTEMBER 25, 1998 Deferred tax assets: Accounts receivable ...

  • Page 55
    ... that may result from tax examinations. NOTE 6--SHAREHOLDERS' EQUITY PREFERRED STOCK In August 1997, the Company and Microsoft Corporation (Microsoft) entered into patent cross licensing and technology agreements. In addition, Microsoft purchased 150,000 shares of Apple Series "A' non-voting...

  • Page 56
    ... Board of Directors approved the 1997 Employee Stock Option Plan (the 1997 Plan), for grants of stock options to employees who are not officers of the Company. Options may be granted under the 1997 Plan to employees at not less than the fair market value on the date of grant. These options generally...

  • Page 57
    ... TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE 6--SHAREHOLDERS' EQUITY (CONTINUED) purchase for $200 an amount of common stock of the Company, or, in certain circumstances, securities of the acquiror, having a then-current market value of two times the exercise price of the Right. The Rights...

  • Page 58
    ... use of option valuation models that were not developed for use in valuing employee stock options and employee stock purchase plan shares. Under APB No. 25, when the exercise price of the Company's employee stock options equals the market price of the underlying stock on the date of the grant...

  • Page 59
    ... and employee stock purchase plan purchases subsequent to September 29, 1995, under the fair value method of that Statement. The fair values for these options and stock purchases were estimated at the date of grant and beginning of the period, respectively, using a Black-Scholes option pricing model...

  • Page 60
    ... by the Company. The Third Amended Complaint was filed in October 1997, and eliminated the class action claims and restated claims against certain directors and former directors. In November 1997, the Company's Board of Directors appointed a special investigation committee and engaged independent...

  • Page 61
    ... was named in a purported class action alleging similar claims filed in the New Jersey Superior Court for Essex County, entitled Maizes & Maizes v. Apple Computer, Inc. et al.. The complaints in all of these cases seek restitution in the form of refunds or product exchange, damages, punitive damages...

  • Page 62
    ... Corporations Code. The parties are currently conducting discovery. FTC INQUIRY--PRADO VS. APPLE COMPUTER (AND RELATED ACTIONS) In October 1997, Apple began charging all US non-education customers for live telephone technical support beyond 90 days after purchase of Apple products. In late 1997...

  • Page 63
    ... affected if its outsourcing partners were unable to meet their production obligations. NOTE 11--INDUSTRY SEGMENT AND GEOGRAPHIC INFORMATION The Company operates in one principal industry segment: the design, manufacture, and sale of personal computing products. The Company's products are sold...

  • Page 64
    ... and equity securities. A large portion of the Company's revenue is derived from its international operations, and a majority of the products sold internationally are manufactured in the Company's facilities in Cork, Ireland and Singapore. As a result, the Company is subject to risks associated with...

  • Page 65
    ... purchased in-process research and development which was charged to operations upon acquisition. Net loss for the fourth quarter of 1997 includes a $62 million charge to increase the Company's restructuring reserves, as well as a $75 million charge related to the termination of the license agreement...

  • Page 66
    SCHEDULE II APPLE COMPUTER, INC. VALUATION AND QUALIFYING ACCOUNTS (IN MILLIONS) CHARGED TO COSTS AND EXPENSES 11 $ 35 $ 28 ALLOWANCE FOR DOUBTFUL ACCOUNTS Year Ended September 25, 1998...Year Ended September 26, 1997...Year Ended September 27, 1996... BEGINNING BALANCE 99 $ 91 $ 87 DEDUCTIONS...

  • Page 67
    ... (IBM) as Senior Vice President and Chief Financial Officer, and he served as a director of IBM from January 1995 to August 1995. Prior to joining IBM, Mr. York served in a number of executive positions at Chrysler Corporation, including Executive Vice President--Finance and Chief Financial Officer...

  • Page 68
    ... Sales and Marketing with Pyramid Technology Corporation from January 1993 to November 1995. JONATHAN RUBINSTEIN, Senior Vice President, Hardware Engineering (age 42), joined the Company in February 1997. Before joining the Company, Mr. Rubinstein was Executive Vice President and Chief Operating...

  • Page 69
    ... own more than ten percent of a registered class of the Company's equity securities, to file reports of securities ownership and changes in such ownership with the Securities and Exchange Commission (the "SEC"). Officers, directors and greater than ten percent shareholders also are required by rules...

  • Page 70
    ... Operations...Jonathan Rubinstein...Senior Vice President,...Hardware Engineering...Mitchell Mandich...Senior Vice President,...Worldwide Sales... 500,000(8) ---100,000 --104,000 (1) Mr. Jobs was granted 30,000 stock options in his capacity as a director of the Company pursuant to the 1997 Director...

  • Page 71
    ..., and canceled pursuant to the stock option exchange program. (6) Consists of $245,497 in relocation assistance and $4,992 in matching contributions made by the Company in accordance with the terms of its 401(k) plan. (7) Consists of $140,155 in relocation assistance and $1,206 in matching...

  • Page 72
    ..., 1997 on a one-for-one basis pursuant to the stock option exchange program. Options typically vest in four equal annual installments commencing on the first anniversary of the date of grant. (2) All options were granted at an exercise price equal to the fair market value based on the closing market...

  • Page 73
    ...per share, the closing price of Common Stock on the Nasdaq National Market on September 25, 1998), minus the exercise price. STOCK OPTION EXCHANGE PROGRAM The following table sets forth certain information concerning the Exchange Program, including (i) the name and position of each executive officer...

  • Page 74
    ...18.125 13.6875 13.25 13.6875 NAME AND POSITION Fred D. Anderson Executive Vice President and Chief Financial Officer Guerrino De Luca (1) Executive Vice President, Marketing LENGTH OF ORIGINAL OPTION TERM REMAINING AT DATE OF REPRICING 9 years 8 months 8 years 9 months 9 years 9 months 9 years...

  • Page 75
    ... 8 months 9 years 9 months 9 years 8 months 9 years 8 months 9 years 7 months 9 years 11 months David Manovich (1) Senior Vice President, International Sales and Service Jonathan Rubinstein Senior Vice President, Hardware Engineering Sina Tamaddon Senior Vice President, Service and Support 71

  • Page 76
    ... upon termination of employment. COMPENSATION COMMITTEE REPORT ON THE STOCK OPTION EXCHANGE PROGRAM In order to address concerns regarding the retention of the Company's key employees, the Compensation Committee approved a stock option exchange program (the "Exchange Program") on December 21, 1997...

  • Page 77
    ... outstanding shares of Common Stock; (ii) each director; (iii) each Named Executive Officer listed in the Summary Compensation Table under the heading "Executive Compensation" and (iv) all directors and executive officers as a group. On the Table Date, 135,248,323 shares of Common Stock were issued...

  • Page 78
    ... and directors and options held by such individuals that were exercisable at the Table Date or within 60 days thereafter. * Amount represent less than 1% of the issued and outstanding shares of Common Stock on the Table Date. ITEM 13. ARRANGEMENTS WITH NAMED EXECUTIVE OFFICERS EMPLOYMENT AGREEMENTS...

  • Page 79
    ...exercisable as of the date of a change in control as defined in the Equity Plans, regardless of whether the executive officer's employment has then terminated. Subject to certain limits on payments, the Retention Agreements also require tax gross-up payments to the executive officers to mitigate any...

  • Page 80
    ...the Company received new option grants under the 1990 Stock Option Plan. No executive officers received options under the 1998 Executive Officer Stock Plan. The Options granted under the 1990 Stock Option Plan were at an exercise price equal to the fair market value of the Common Stock and generally...

  • Page 81
    ... as a tool for employee retention and as a long-term incentive. To address this problem, the Compensation Committee consulted with an independent benefits consultant and, after considering various methods of dealing with this problem, approved the stock option exchange program (the "Exchange Program...

  • Page 82
    ..., regarding the Company's expected profits and revenues for the first quarter of fiscal 1998. (c) Exhibits EXHIBIT NUMBER ----------2 NOTES 97/1Q DESCRIPTION Agreement and Plan of Merger Among Apple Computer, Inc., Blackbird Acquisition Corporation and NeXT Software, Inc., dated as of December...

  • Page 83
    ... Plan. Form of Director Warrant. 1990 Stock Option Plan, as amended through November 5, 1997. Apple Computer, Inc. Employee Stock Purchase Plan, as amended through September 9, 1996. 1996 Senior/Executive Incentive Bonus Plan. Form of Indemnification Agreement between the Registrant and each officer...

  • Page 84
    ... 2, 1996, between Registrant and John B. Douglas III. Senior Officers Restricted Performance Share Plan, as amended through March 25, 1997. NeXT Computer, Inc. 1990 Stock Option Plan, as amended. Non-Employee Director Stock Plan. Retention Agreement dated May 1, 1997 between Apple Computer, Inc. and...

  • Page 85
    ... Business Machines Corporation. Stock Purchase Agreement dated April 4, 1996 between Registrant and SCI Systems, Inc. Fountain Manufacturing Agreement dated May 31, 1996 between Registrant and SCI Systems, Inc. Preferred Stock Purchase Agreement, dated as of August 5, 1997, between Apple Computer...

  • Page 86
    ... certain portions of these agreements has been granted. Incorporated by reference to Exhibit 1 to the Company's Registration Statement on Form 8-A filed with the Securities and Exchange Commission on May 26, 1989. Incorporated by reference to Exhibit 3.2 to the Company's Quarterly Report on Form 10...

  • Page 87
    ... of that number in the Company's Quarterly Report on Form 10-Q for the quarter ended December 26, 1997. Incorporated by reference to the exhibit of that number in the Company's Quarterly Report on Form 10-Q for the quarter ended March 27, 1998. 98/1Q 98/2Q (d) Financial Statement Schedule See...

  • Page 88
    ... Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, this 21st day of December 1998. APPLE COMPUTER, INC. By: /s/ FRED D. ANDERSON Fred D. Anderson EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER...

  • Page 89
    ..., INC* JURISDICTION OF INCORPORATION Netherlands Ireland Ireland Japan NAME Apple Computer B.V. Apple Computer, Inc. Limited Apple Computer Limited Apple Japan, Inc. * Pursuant to Item 601(b)(21)(ii) of Regulation S-K, the names of other subsidiaries of Apple Computer, Inc. are omitted because...

  • Page 90
    ... Forms S-3/A of Apple Computer, Inc. of our report dated October 14, 1998, relating to the consolidated balance sheets of Apple Computer, Inc. and subsidiaries as of September 25, 1998 and September 26, 1997, and the related consolidated statements of operations, shareholders' equity, and cash flows...

  • Page 91
    ... Restricted Stock Plan, the Form of Director Warrant of Apple Computer, Inc., the NeXT Software, Inc. 1990 Stock Option Plan, the 1997 Employee Stock Option Plan, the 1997 Director Stock Option Plan, the 1998 Executive Officer Stock Plan and the Senior Officers Restricted Performance Share Plan, and...

  • Page 92
    ... SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS CURRENT LIABILITIES BONDS PREFERRED MANDATORY PREFERRED COMMON OTHER SE TOTAL LIABILITY AND EQUITY SALES TOTAL REVENUES CGS TOTAL COSTS OTHER EXPENSES LOSS PROVISION INTEREST EXPENSE INCOME PRETAX INCOME TAX...