Apple 2003 Annual Report Download - page 79

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100
during the second and first quarters of 2003 included restructuring charges, net of tax, of $2 million and $18 million, respectively. Net loss for
the first quarter of 2003 included an after-tax unfavorable cumulative-effect type adjustment for the adoption of SFAS No.143 of $2 million.
Net loss for the fourth quarter of 2002 included the following items, net of tax: the write
-down of certain equity investments totaling
$49 million; a restructuring charge of $4 million; an in-process research and development charge of approximately $1 million; and the reversal
of a portion of a previous executive compensation expense resulting in a favorable impact of $2 million. Net income for the first quarter of
2002 included a restructuring charge, net of tax, of $18 million. Net income during the first quarter of 2002 also included gains, net of tax, of
$17 million related to non-current investments.
101
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
Apple Computer, Inc.:
We have audited the accompanying consolidated balance sheets of Apple Computer, Inc. and subsidiaries as of September 27, 2003 and
September 28, 2002, and the related consolidated statements of operations, shareholders' equity, and cash flows for each of the years in the
three-
year period ended September 27, 2003. These consolidated financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Apple
Computer, Inc. and subsidiaries as of September 27, 2003 and September 28, 2002, and the results of their operations and their cash flows for
each of the years in the three-year period ended September 27, 2003, in conformity with accounting principles generally accepted in the United
States of America.
As discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for asset retirement obligations
and for financial instruments with characteristics of both liabilities and equity in 2003, changed its method of accounting for goodwill in 2002,
and changed its method of accounting for hedging activities in 2001.
Mountain View, California
October 14, 2003
102
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.
Item 9A. Controls and Procedures
Based on an evaluation under the supervision and with the participation of the Company's management, the Company's principal executive
officer and principal financial officer have concluded that the Company's disclosure controls and procedures (as defined in Rules 13a
-
14(c) and
/s/
KPMG LLP