Apple 2006 Annual Report Download - page 49

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(2)
The Selected Financial Data for 2003 and 2002 has been restated to reflect adjustments related to stock-based compensation expense and
the associated tax impact as further described in the “Explanatory Note” immediately preceding Part I, Item 1 of this Form 10-K. As a
result of these adjustments, net income was reduced by $12 million and $23 million for the years ended September 27, 2003 and
September 28, 2002, respectively as follows:
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. Forward-looking
statements can also be identified by words such as “anticipates,” “expects,” “believes,” “plans,” “predicts,” and similar terms. Forward-
looking statements are not guarantees of future performance and 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 “Risk Factors” above. 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 presented herein is based on the Company’s fiscal calendar. Unless
otherwise stated, references in this report to particular years or quarters refer to the Company’s fiscal years ended in September and the
associated quarters of those fiscal years. The Company assumes no obligation to revise or update any forward-looking statements for any
reason, except as required by law.
The following information has been adjusted to reflect the restatement of the Company’s financial results, which is more fully described in the
“Explanatory Note” immediately preceding Part I, Item 1 and in Note 2, “Restatement of Consolidated Financial Statements” in Notes to
Consolidated Financial Statements of this Form 10-K. The net of tax impact of the adjustments, which amounted to $4 million in 2006, was
recorded by the Company in its fourth quarter of 2006. The net of tax impact of the restatements on the Company’s results of operations
amounted to $7 million and $10 million in 2005 and 2004,
48
Fiscal Year Ended September 27,
2003
Fiscal Year Ended September 28,
2002
As
Reported
Adjustments
As
Restated
As
Reported
Adjustments
As
Restated
Net sales
$
6,207
$
—
$
6,207
$
5,742
$
—
$
5,742
Cost of sales
4,499
1
4,500
4,139
3
4,142
Gross margin
1,708
(1
)
1,707
1,603
(3
)
1,600
Total operating expenses
1,709
15
1,724
1,586
26
1,612
Operating income (loss)
(1
)
(16
)
(17
)
17
(29
)
(12
)
Income before accounting
changes
68
(12
)
56
65
(23
)
42
Cumulative effects of accounting
changes, net of income taxes
1
—
1
—
—
—
Net income
$
69
$
(12
)
$
57
$
65
$
(23
)
$
42
Earnings (loss) per common share
before accounting changes:
Basic
$
0.09
$
(0.01
)
$
0.08
$
0.09
$
(0.03
)
$
0.06
Diluted
$
0.09
$
(0.01
)
$
0.08
$
0.09
$
(0.03
)
$
0.06
Earnings per common share:
Basic
$
0.10
$
(0.02
)
$
0.08
$
0.09
$
(0.03
)
$
0.06
Diluted
$
0.09
$
(0.01
)
$
0.08
$
0.09
$
(0.03
)
$
0.06