Apple 2004 Annual Report Download - page 48

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outstanding third-party manufacturing commitments and component purchase commitments of approximately $1.1 billion.
Asset Retirement Obligations
The Company's asset retirement obligations are associated with commitments to return property subject to operating leases to original condition
upon lease termination. As of September 25, 2004, the Company estimates that gross expected future cash flows of approximately $12 million
would be required to fulfill these obligations.
Other Obligations
The Company's other obligations of approximately $24 million are primarily related to telecommunications services.
Indemnifications
The Company generally does not indemnify end-users of its operating system and application software against legal claims that the software
infringes third-party intellectual property rights. Other agreements entered into by the Company sometimes include indemnification provisions
under which the Company could be subject to costs and/or damages in the event of an infringement claim against the Company or an
indemnified third-party. However, the Company has not been required to make any significant payments resulting from such an infringement
claim asserted against itself or an indemnified third-party and, in the opinion of management, does not have a liability related to unresolved
infringement claims subject to indemnification that would have a material adverse affect on its financial condition, liquidity or results of
operations.
Factors That May Affect Future Results and Financial Condition
Because of the following factors, as well as other factors affecting the Company's operating results and financial condition, past financial
performance should not be considered to be a reliable indicator of future performance, and investors should not use historical trends to anticipate
results or trends in future periods.
General economic conditions and current economic and political uncertainty could adversely affect the demand for the Company's products and
the financial health of its suppliers, distributors, and resellers.
The Company's operating performance depends significantly on general economic conditions in the U.S. and abroad. Over the past several years,
demand for the Company's products has been negatively impacted by difficult global economic conditions. Additionally, some of the Company's
education customers appeared to be delaying technology purchases due to concerns about the overall impact of the weaker economy and state
budget deficits on their available funding. Although recent macroeconomic trends seem to indicate an economic recovery, continued uncertainty
about future economic conditions makes it difficult to forecast future demand for the Company's products and related operating results. Should
global and/or regional economic conditions deteriorate, demand for the Company's products could be adversely affected, as could the financial
health of its suppliers, distributors, and resellers.
War, terrorism, public health issues or other business interruptions could disrupt supply, delivery or demand of products, which could negatively
affect the Company's operations and performance.
War, terrorism, public health issues and other business interruptions whether in the U.S. or abroad, have caused and could continue to cause
damage or disruption to international commerce by creating economic and political uncertainties that may have a strong negative impact on the
global economy, the Company, and the Company's suppliers or customers. The Company's major business operations are subject to interruption
by earthquake, fire, power shortages, terrorist attacks and other hostile acts, labor disputes, medical conditions, and other events beyond its
control. The majority of the Company's research and development activities, its corporate headquarters, information technology systems, and
other critical business operations, including certain component suppliers and manufacturing vendors, are located near
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