Apple 2005 Annual Report Download - page 47

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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 effect 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. At times in the past,
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 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, other natural disasters, fire, power shortages, terrorist attacks and other hostile acts, labor disputes, public health issues, 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
major seismic faults. Because the Company does not carry earthquake insurance for direct quake-related losses, the Company’s operating
results and financial condition could be materially adversely affected in the event of a major earthquake or other natural or manmade disaster.
Although it is impossible to predict the occurrences or consequences of any such events, such events could result in a decrease in demand for
the Company’
s products, make it difficult or impossible for the Company to deliver products to its customers or to receive components from its
suppliers, and could create delays and inefficiencies in the Company’s supply chain. In addition, should major public health issues, including
pandemics, arise, the Company could be negatively impacted by the need for more stringent employee travel restrictions, additional limitations
in the availability of freight services, governmental actions limiting the movement of products between various regions, delays in production
ramps of new products, and disruptions in the operations of the Company’s manufacturing vendors and component suppliers. The Company’s
operating results and financial condition have been, and in the future may be, adversely affected by these events.
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