8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

July 13, 2005

Date of Report (date of earliest event reported)

APPLE COMPUTER, INC.

(Exact name of Registrant as specified in its charter)

California	0-10030	94-2404110
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification Number)

1 Infinite Loop, Cupertino, CA 95014

(Address of principal executive offices)

(408) 996-1010

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed

since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02Results of Operations and Financial Condition

On July 13, 2005, Apple Computer, Inc. (Apple) issued a press release regarding Apple’s financial results for its third fiscal quarter ended June 25, 2005 and a related data sheet. A copy of Apple’s press release is attached hereto as Exhibit 99.1 and a copy of the related data sheet is attached hereto as Exhibit 99.2.

The information contained in this Current Report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 Item 9.01Financial Statements and Exhibits

(c) Exhibits

The following exhibits are furnished herewith:

Exhibit Number	Description
99.1	Text of press release issued by Apple Computer, Inc. dated July 13, 2005.
99.2	Data sheet issued by Apple Computer, Inc. dated July 13, 2005.

2

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		APPLE COMPUTER, INC.
Date: July 13, 2005
	By:	/s/ Peter Oppenheimer
		Peter Oppenheimer
		Senior Vice President and Chief Financial Officer

3

EXHIBIT INDEX

Exhibit Number	Description
99.1	Text of press release issued by Apple Computer, Inc. dated July 13, 2005.
99.2	Data sheet issued by Apple Computer, Inc. dated July 13, 2005.

4

EX-99.1

Exhibit 99.1

Apple Reports Third Quarter Results

Apple Delivers Record Revenue & Earnings

CUPERTINO, California—July 13, 2005—Apple® today announced financial results for its fiscal 2005 third quarter ended June 25, 2005, reporting the highest revenue and earnings in the Company’s history. Apple posted a net quarterly profit of $320 million, or $.37 per diluted share, and revenue of $3.52 billion. These results compare to a net profit of $61 million, or $.08 per diluted share, and revenue of $2.01 billion in the year-ago quarter, and represent revenue growth of 75 percent and net profit growth of 425 percent. Gross margin was 29.7 percent, up from 27.8 percent in the year-ago quarter. International sales accounted for 39 percent of the quarter’s revenue.

Apple shipped 1,182,000 Macintosh® units and 6,155,000 iPods during the quarter, representing 35 percent growth in Macs and 616 percent growth in iPods over the year-ago quarter.

“We are delighted to report Apple’s best quarter ever in both revenue and earnings,” said Steve Jobs, Apple’s CEO. “The launch of Mac OS X Tiger has been a tremendous success, and we have more amazing new products in the pipeline.”

“We’re very pleased to report 75 percent revenue growth and a 425 percent increase in net income,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the fourth quarter of fiscal 2005, we expect revenue of about $3.5 billion and earnings per diluted share of about $.32.”

Apple will provide live streaming of its Q3 2005 financial results conference call utilizing QuickTime™, Apple’s standards-based technology for live and on-demand audio and video streaming. The live webcast will begin at 2:00 p.m. PDT on Wednesday, July 13, 2005 at http://www.apple.com/quicktime/qtv/earningsq305/ and will also be available for replay. The QuickTime player is available free for Macintosh and Windows users at www.apple.com/quicktime.

This press release contains forward-looking statements about future products and the Company’s estimated revenue and earnings for the fourth quarter of fiscal 2005. These statements involve risks and uncertainties and actual results may differ. Potential risks and uncertainties include continued competitive pressures in the marketplace; the effect competitive and economic factors and the Company’s reaction to them may have on consumer and business buying decisions with respect to the Company’s products; the ability of the Company to make timely delivery of new programs, products and successful technological innovations to the marketplace; the continued availability on acceptable terms of certain components and services essential to the Company’s business currently obtained by the Company from sole or limited sources including G4 and G5 microprocessors; possible disruption in commercial activities caused by terrorist activity and armed conflict, such as changes in logistics and security arrangements, and reduced end-user purchases relative to expectations; possible disruption in commercial activity as a result of natural disasters or major health concerns including epidemics; risks associated with the Company’s retail initiative including significant investment cost, uncertain consumer acceptance and potential impact on existing reseller relationships; the effect that the

Company’s dependency on manufacturing and logistics services provided by third parties may have on the quality, quantity or cost of products manufactured or services rendered; the Company’s reliance on the availability of third-party music content; the ability of the Company to successfully evolve its operating system; the ability of the Company to make timely delivery of new products with Intel microprocessors and related hardware and software technological changes and innovations to support Intel microprocessors; the development and availability on acceptable terms of components and services essential to enable the Company to deliver products based on Intel microprocessors in a timely manner; the Company’s dependency on third-party software developers to timely develop future applications that support Intel microprocessors and Power PC microprocessors; and the potential negative impact the transition of all Macs to Intel microprocessors by the end of 2007, or the announcement of such transition, might have on sales of current or future Mac products with Power PC processors. More information on potential factors that could affect the Company’s financial results is included from time to time in the Company’s public reports filed with the SEC, including the Company’s Form 10-K for the fiscal year ended September 25, 2004, the Company’s Form 10-Q for the quarter ended December 25, 2004, the Company’s Form 10-Q for the quarter ended March 26, 2005, and the Company’s Form 10-Q for the quarter ended June 25, 2005 to be filed with the SEC. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning desktop and notebook computers, OS X operating system, and iLife and professional applications. Apple is also spearheading the digital music revolution with its iPod portable music players and iTunes online music store.

Press Contact:

Steve Dowling

Apple

(408) 974-1896

dowling@apple.com

Investor Relations Contacts:

Nancy Paxton

Apple

(408) 974-5420

paxton1@apple.com

Joan Hoover

Apple

(408) 974-4570

hoover1@apple.com

NOTE TO EDITORS: For additional information visit Apple’s PR website (www.apple.com/pr/), or call Apple’s Media Helpline at (408) 974-2042.

© 2005 Apple Computer, Inc. All rights reserved. Apple, the Apple logo, Mac, Mac OS, Macintosh and QuickTime are trademarks of Apple. Other company and product names may be trademarks of their respective owners.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except share amounts)

ASSETS:

	June 25, 2005			September 25, 2004
Current assets:
Cash and cash equivalents	$	3,094		$	2,969
Short-term investments	4,432			2,495
Accounts receivable, less allowances of $49 and $47, respectively	827			774
Inventories	193			101
Deferred tax assets	334			231
Other current assets	496			485
Total current assets	9,376			7,055
Property, plant, and equipment, net	764			707
Goodwill	80			80
Acquired intangible assets	29			17
Other assets	239			191
Total assets	$	10,488		$	8,050
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
Accounts payable	$	1,530		$	1,451
Accrued expenses	1,593			1,200
Total current liabilities	3,123			2,651
Non-current liabilities	544			323
Total liabilities	3,667			2,974
Commitments and contingencies
Shareholders’ equity:
Common stock, no par value; 1,800,000,000 shares authorized; 827,981,177 and 782,887,234 shares issued and outstanding, respectively	3,299			2,514
Deferred stock compensation	(62		)	(93		)
Retained earnings	3,575			2,670
Accumulated other comprehensive income (loss)	9			(15		)
Total shareholders’ equity	6,821			5,076
Total liabilities and shareholders’ equity	$	10,488		$	8,050

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except share and per share amounts)

	THREE MONTHS ENDED				NINE MONTHS ENDED
	June 25, 2005		June 26, 2004		June 25, 2005		June 26, 2004
Net sales	$	3,520	$	2,014	$	10,253	$	5,929
Cost of sales	2,476		1,455		7,245		4,304
Gross margin	1,044		559		3,008		1,625
Operating expenses:
Research and development	145		125		387		367
Selling, general, and administrative	472		354		1,389		1,042
Restructuring costs	—		8		—		18
Total operating expenses	617		487		1,776		1,427
Operating income	427		72		1,232		198
Other income and expense:
Gains on non-current investments	—		—		—		4
Interest and other income, net	46		13		105		34
Total other income and expense	46		13		105		38
Income before provision for income taxes	473		85		1,337		236
Provision for income taxes	153		24		432		66
Net income	$	320	$	61	$	905	$	170
Earnings per common share:
Basic	$	0.39	$	0.08	$	1.13	$	0.23
Diluted	$	0.37	$	0.08	$	1.06	$	0.22
Shares used in computing earnings per share (in thousands):
Basic	815,092		750,046		804,098		735,212
Diluted	860,688		785,242		853,105		762,518

RECONCILIATION OF NON-GAAP TO GAAP RESULTS OF OPERATIONS

(In millions, except share and per share amounts)

	Three Months Ended June 25, 2005							Three Months Ended June 26, 2004
	As Reported		Non-GAAP Adjustments		(a)	Non- GAAP		As Reported		Non-GAAP Adjustments		(a)	Non- GAAP
Operating income	$	427	$	11	(b)	$	438	$	72	$	18	(c)	$	90
Total other income and expense	46		—			46		13		—			13
Provision for income taxes	153		1		(d)	154		24		4		(d)	28
Net income	$	320	$	10		$	330	$	61	$	14		$	75
Earnings per common share:
Basic	$	0.39				$	0.40	$	0.08				$	0.10
Diluted	$	0.37				$	0.38	$	0.08				$	0.10
Shares used in computing earnings per share (in thousands):
Basic	815,092					815,092		750,046					750,046
Diluted	860,688					860,688		785,242					785,242

(a)These adjustments reconcile the Company’s GAAP results of operations to its non-GAAP results of operations. The Company believes that presentation of results excluding items such as non-cash share-based compensation, restructuring costs, and investment gains provides meaningful supplemental information to both management and investors that is indicative of the Company’s core operating results and facilitates comparison of operating results across reporting periods. The Company uses these non-GAAP measures when evaluating its financial results as well as for internal planning and forecasting purposes.  These non-GAAP measures should not be viewed as a substitute for the Company’s GAAP results. Neither the Company’s GAAP nor non-GAAP results of operations include the accounting impact had the Company chosen to apply the fair-value recognition provisions of SFAS No. 123 or SFAS No. 123 revised (123R) to expense share-based compensation, the impact of which is disclosed in the Company’s Forms 10-Q and 10-K as filed with the SEC. The Company expects to adopt SFAS No. 123R in its first fiscal quarter ending December 31, 2005.

(b)This adjustment reflects the non-cash compensation expense related primarily to restricted stock awarded to the Company’s CEO in fiscal 2003 and restricted stock units awarded to selected members of the Company’s senior management team in fiscal 2004.  Of the total non-cash compensation expense of $11 million, $2 million is included in research and development expense and $9 million is included in selling, general and administrative expense. Note that neither the Company’s GAAP nor non-GAAP results of operations includes the accounting impact had the Company chosen to apply the fair-value recognition provisions of SFAS No. 123R.

(c)This adjustment includes $8 million related to restructuring actions initiated during the third quarter of fiscal 2004 as well as $10 million related to non-cash compensation expense primarily attributable to restricted stock awarded to the Company’s CEO and restricted stock units awarded to selected members of the Company’s senior management team. Of the total non-cash compensation expense of $10 million, $1 million is included in research and development expense and $9 million is included in selling, general and administrative expense.

(d)Amount reflects the expected tax impact on the above noted non-GAAP adjustments.

RECONCILIATION OF NON-GAAP TO GAAP RESULTS OF OPERATIONS

(In millions, except share and per share amounts)

	Nine Months Ended June 25, 2005							Nine Months Ended June 26, 2004
	As Reported		Non-GAAP Adjustments		(a)	Non- GAAP		As Reported		Non-GAAP Adjustments		(a)	Non- GAAP
Operating income	$	1,232	$	31	(b)	$	1,263	$	198	$	41	(c)	$	239
Total other income and expense	105		—			105		38		(4		)(d)	34
Provision for income taxes	432		3		(e)	435		66		7		(e)	73
Net income	$	905	$	28		$	933	$	170	$	30		$	200
Earnings per common share:
Basic	$	1.13				$	1.16	$	0.23				$	0.27
Diluted	$	1.06				$	1.09	$	0.22				$	0.26
Shares used in computing earnings per share (in thousands):
Basic	804,098					804,098		735,212					735,212
Diluted	853,105					853,105		762,518					762,518

(a)These adjustments reconcile the Company’s GAAP results of operations to its non-GAAP results of operations. The Company believes that presentation of results excluding items such as non-cash share-based compensation, restructuring costs, and investment gains provides meaningful supplemental information to both management and investors that is indicative of the Company’s core operating results and facilitates comparison of operating results across reporting periods. The Company uses these non-GAAP measures when evaluating its financial results as well as for internal planning and forecasting purposes.  These non-GAAP measures should not be viewed as a substitute for the Company’s GAAP results. Neither the Company’s GAAP nor non-GAAP results of operations include the accounting impact had the Company chosen to apply the fair-value recognition provisions of SFAS No. 123 or SFAS No. 123 revised (123R) to expense share-based compensation, the impact of which is disclosed in the Company’s Forms 10-Q and 10-K as filed with the SEC. The Company expects to adopt SFAS No. 123R in its first fiscal quarter ending December 31, 2005.

(b)This adjustment reflects the non-cash compensation expense related primarily to restricted stock awarded to the Company’s CEO in fiscal 2003 and restricted stock units awarded to selected members of the Company’s senior management team in fiscal 2004. Of the total non-cash compensation expense of $31 million, $1 million is included in cost of sales; $4 million is included in research and development expense; and $26 million is included in selling, general and administrative expense. Note that neither the Company’s GAAP nor non-GAAP results of operations includes the accounting impact had the Company chosen to apply the fair-value recognition provisions of SFAS No. 123R.

(c)This adjustment includes $18 million related to restructuring actions initiated during the second and third quarters of fiscal 2004 as well as $23 million related to non-cash compensation expense primarily attributable to restricted stock awarded to the Company’s CEO and restricted stock units awarded to selected members of the Company’s senior management team. Of the total non-cash compensation expense of $23 million, $2 million is included in research and development expense and $21 million is included in selling, general and administrative expense.

(d)This adjustment represents gain on sales of non-current investments.

(e)Amount reflects the expected tax impact on the above noted non-GAAP adjustments.

EX-99.2

Exhibit 99.2

Apple Computer, Inc.

Q3 2005 Unaudited Summary Data

	Q2 2005 Actual			Q3 2004 Actual			Q3 2005 Actual			Sequential Change		Year/Year Change
Operating Segments	CPU Units k	Rev $m		CPU Units k	Rev $m		CPU Units k	Rev $m		Units	Revenue	Units	Revenue
Americas	477	$	1,443	472	$	1,018	595	$	1,739	25%	21%	26%	71%
Europe	276	705		191	408		283	742		3%	5%	48%	82%
Japan	102	284		82	172		76	227		-25%	-20%	-7%	32%
Retail	144	571		73	270		144	555		0%	-3%	97%	106%
Other Segments (1)	71	240		58	146		84	257		18%	7%	45%	76%
Total Operating Segments	1,070	$	3,243	876	$	2,014	1,182	$	3,520	10%	9%	35%	75%
										Sequential Change		Year/Year Change
	Units k	Rev $m		Units k	Rev $m		Units k	Rev $m		Units	Revenue	Units	Revenue
Product Summary
Desktops (2)	608	$	803	416	$	567	687	$	845	13%	5%	65%	49%
Portables (3)	462	691		460	696		495	720		7%	4%	8%	3%
Subtotal CPUs	1,070	1,494		876	1,263		1,182	1,565		10%	5%	35%	24%
iPod	5,311	1,014		860	249		6,155	1,103		16%	9%	616%	343%
Other Music Products (4)	NM	216		NM	73		NM	241		NM	12%	NM	230%
Peripherals & Other HW	NM	280		NM	219		NM	266		NM	-5%	NM	21%
Software & Other	NM	239		NM	210		NM	345		NM	44%	NM	64%
Total Apple		$	3,243		$	2,014		$	3,520		9%		75%

(1)Other Segments include Asia Pacific and FileMaker.

(2)Includes iMac, eMac, Mac mini, PowerMac and Xserve product lines.

(3)Includes iBook and PowerBook product lines.

(4)Other Music Products consists of iTunes Music Store sales and iPod related services and accessories.

NM: Not Meaningful