Apple 1999 Annual Report Download - page 12

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ITEM 7. 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. THE COMPANY'S ACTUAL RESULTS MAY DIFFER SIGNIFICANTLY FROM THE RESULTS
DISCUSSED IN THE FORWARD-LOOKING STATEMENTS. 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. 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 IS BASED ON THE COMPANY'S FISCAL CALENDAR.
RESULTS OF OPERATIONS
The following table sets forth annual results of operations for fiscal years 1999, 1998, and 1997 (in millions, except unit shipment and per share
amounts):
9
1999 CHANGE 1998 CHANGE 1997
-------- -------- -------- -------- --------
Net sales...................................... $6,134 3% $5,941 (16)% $ 7,081
Macintosh CPU unit sales (in thousands)...... 3,448 25% 2,763 (4)% 2,874
Gross margin................................... $1,696 15% $1,479 8% $ 1,368
Percentage of net sales...................... 28% 25% 19%
Research and development....................... $ 314 4% $ 303 (38)% $ 485
Percentage of net sales...................... 5% 5% 7%
Selling, general and administrative............ $ 996 10% $ 908 (29)% $ 1,286
Percentage of net sales...................... 16% 15% 18%
Special charges:
In-process research and development.......... $ -- $ 7 $ 375
Restructuring costs.......................... $ 27 $ -- $ 217
Termination of license agreement............. $ -- $ -- $ 75
Gains from sales of investment................. $ 230 $ 40 $ --
Interest and other income, net................. $ 87 211% $ 28 12% $ 25
Provision for income taxes..................... $ 75 275% $ 20 $ --
Net income (loss).............................. $ 601 95% $ 309 130% $(1,045)
Earnings (loss) per common share:
Basic........................................ $ 4.20 79% $ 2.34 128% $ (8.29)
Diluted...................................... $ 3.61 72% $ 2.10 125% $ (8.29)