Apple 1999 Annual Report Download - page 67

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 9--SEGMENT INFORMATION AND GEOGRAPHIC DATA (CONTINUED)
Information regarding net sales by product is as follows (in millions):
(a) Net sales figures for iMac in 1998 and 1997 include sales of the Company's previous consumer and education oriented Macintosh products.
NOTE 10--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 during the fourth, third, second, and first quarters of 1999 included after tax gains resulting from the sale of shares of the
Company's investment in ARM of $37 million, $89 million, $50 million, and $29 million, respectively. Gains before tax on the sale of ARM
shares are recognized as other income. Net income for the fourth quarter of 1999 included a net $18 million restructuring charge for contract
cancellation charges related to previously outsourced services and previously discontinued business. Net income for the second quarter of 1999
included a $9 million restructuring charge resulting from actions by the Company to improve the flexibility and efficiency of its manufacturing
operations, which included moving final assembly of certain of its products to third-party manufacturers.
Net income for the third quarter of 1998 included after tax gains resulting from the sale of shares of the Company's investment in ARM of $33
million. The third quarter of 1998 also includes the recognition of
$7 million of purchased in-process research and development charged to operations upon acquisition.
63
1999 1998 1997
-------- -------- --------
Net Sales:
Power Macintosh..................................... $2,345 $2,421 $2,341
PowerBook........................................... 823 913 1,172
iMac (a)............................................ 1,905 1,528 2,158
iBook............................................... 9 -- --
Software, Service, and Other Net Sales.............. 1,052 1,079 1,410
------ ------ ------
Total Net Sales................................... $6,134 $5,941 $7,081
====== ====== ======
FOURTH QUARTER THIRD QUARTER SECOND QUARTER FIRST QUARTER
-------------- ------------- -------------- -------------
(TABULAR AMOUNTS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
1999
Net sales................................ $1,336 $1,558 $1,530 $1,710
Gross margin............................. $ 384 $ 427 $ 403 $ 482
Net income............................... $ 111 $ 203 $ 135 $ 152
Earnings per common share:
Basic.................................. $ 0.69 $ 1.41 $ 0.99 $ 1.12
Diluted................................ $ 0.63 $ 1.20 $ 0.84 $ 0.95
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