Apple 1998 Annual Report Download - page 65

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NOTE 11--INDUSTRY SEGMENT AND GEOGRAPHIC INFORMATION (CONTINUED)
obtaining governmental permits and approvals, currency exchange fluctuations, currency restrictions, political instability, labor problems, trade
restrictions, and changes in tariff and freight charges.
NOTE 12--SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
Basic and diluted earnings per share are computed independently for each of the quarters presented. Therefore, the sum of quarterly basic and
diluted per share information may not equal annual basic and diluted earnings per share.
Net income for the third quarter of 1998 includes a $40 million gain before foreign taxes on gains associated with the Company's investment in
ARM which were recognized as other income. Foreign taxes recognized in the third quarter on these gains were approximately $7 million. The
third quarter of 1998 also includes the recognition of $7 million of 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 with PCC. Net loss for the second quarter of 1997 includes a $155 million
restructuring charge, as well as a $375 million write-off of purchased in-
process research and development related to the Company's acquisition
of NeXT.
62
FOURTH QUARTER THIRD QUARTER SECOND QUARTER FIRST QUARTER
--------------- ------------- --------------- -------------
(TABULAR AMOUNTS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
1998
Net sales.......................................... $ 1,556 $ 1,402 $ 1,405 $ 1,578
Gross margin....................................... $ 417 $ 360 $ 349 $ 353
Net income......................................... $ 106 $ 101 $ 55 $ 47
Earnings per common share:
Basic............................................ $ 0.79 $ 0.76 $ 0.42 $ 0.37
Diluted.......................................... $ 0.68 $ 0.65 $ 0.38 $ 0.33
1997
Net sales.......................................... $ 1,614 $ 1,737 $ 1,601 $ 2,129
Gross margin....................................... $ 320 $ 348 $ 303 $ 397
Net loss........................................... $ (161) $ (56) $ (708) $ (120)
Loss per common share:
Basic............................................ $ (1.26) $ (0.44) $ (5.64) $ (0.96)
Diluted.......................................... $ (1.26) $ (0.44) $ (5.64) $ (0.96)