Apple 2006 Annual Report Download - page 65

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(1)
See the “Explanatory Note” immediately preceding Part I, Item 1 and Note 2, “Restatement of Consolidated Financial Statements,” in
Notes to Consolidated Financial Statements of this Form 10-K.
(2)
Includes stock-based compensation expense, which was allocated as follows:
The impact of the stock-based compensation adjustments as described in the Explanatory Note immediately preceding Part I, Item 1 and Note
2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial Statements of this Form 10-
K was not significant to
the interim balance sheets of 2006 and 2005.
64
2005
Fourth Quarter
Third Quarter
Second Quarter
First Quarter
As Restated (1)
As Restated (1)
As Restated (1)
As Restated (1)
Net sales
$
3,678
$
3,520
$
3,243
$
3,490
Cost of sales (2)
2,643
2,476
2,275
2,495
Gross margin
1,035
1,044
968
995
Operating expenses:
Research and development (2)
147
145
120
123
Selling, general, and administrative
(2)
471
473
448
472
Total operating expenses
618
618
568
595
Operating income
417
426
400
400
Other income and expense
60
46
33
26
Income before provision for income
taxes
477
472
433
426
Provision for income taxes
49
153
145
133
Net income
$
428
$
319
$
288
$
293
Earnings per common share:
Basic
$
0.52
$
0.39
$
0.36
$
0.37
Diluted
$
0.49
$
0.37
$
0.34
$
0.35
Shares used in computing earnings per
share (in thousands):
Basic
821,420
815,092
808,172
789,032
Diluted
866,483
860,803
857,568
838,805
Cost of sales
$
1
$
—
$
1
$
1
Research and development
$
1
$
2
$
2
$
2
Selling, general, and
administrative
$
10
$
10
$
9
$
10