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CUPERTINO, Calif., Jan. 12, PR Newswire via NewsEdge Corporation : CUPERTINO, Calif., Jan. 12 /PRNewswire-FirstCall/ — Apple(R) today announced financial results for its fiscal 2005 first quarter ended December 25, 2004. For the quarter, the Company posted a net profit of $295 million, or $.70 per diluted share. These results compare to a net profit of $63 million, or $.17 per diluted share, in the year-ago quarter. Revenue for the quarter was $3.49 billion, up 74 percent from the year-ago quarter. Gross margin was 28.5 percent, up from 26.7 percent in the year-ago quarter. International sales accounted for 41 percent of the quarter's revenue.

Apple shipped 1,046,000 Macintosh(R) units and 4,580,000 iPods during the quarter, representing a 26 percent increase in CPU units and a 525 percent increase in iPods over the year-ago quarter.

We are thrilled to report the highest quarterly revenue and net income in Apple's history, said Steve Jobs, Apple's CEO. We've sold over 10 million iPods to date and are kicking off the new year with a slate of innovative new products including iPod shuffle, Mac mini and iLife '05.

We're pleased to report 74 percent revenue growth, 26 percent Mac unit growth and 525 percent iPod unit growth, said Peter Oppenheimer, Apple's CFO. Looking ahead to the second quarter of fiscal 2005, we expect revenue of about $2.9 billion and earnings per diluted share of about $.40.

Apple will provide live streaming of its Q1 2005 financial results conference call utilizing QuickTime(TM), Apple's standards-based technology for live and on-demand audio and video streaming. The live webcast will begin at 2:00 p.m. PST on Wednesday, January 12, 2005 at http://www.apple.com/quicktime/qtv/earningsq105/ and will also be available for replay. The QuickTime player is available free for Macintosh and Windows users at http://www.apple.com/quicktime.

This press release contains forward-looking statements about the Company's estimated revenue and earnings for the second 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 of certain components and services essential to the Company's business currently obtained by the Company from sole or limited sources, including the timely resolution of manufacturing issues associated with the G5 microprocessors used in many of the Company's Macintosh systems; 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, and the ability of the Company to successfully evolve its operating system and attract sufficient Macintosh developers. 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 and the Company's Form 10-Q for the quarter ended December 25, 2004 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.

. NOTE: Apple, the Apple logo, Macintosh, Mac, Mac OS, iPod and QuickTime are either registered trademarks or trademarks of Apple. Other company and product names may be trademarks of their respective owners..TABLE UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In millions, except share amounts) ASSETS: Dec. 25, Sept. 25, 2004 2004 Current assets: Cash and cash equivalents $2,475 $2,969 Short-term investments 3,973 2,495 Accounts receivable, less allowances of $51 and $47, respectively 865 774 Inventories 156 101 Deferred tax assets 281 231 Other current assets 572 485 Total current assets 8,322 7,055 Property, plant, and equipment, net 735 707 Goodwill 80 80 Acquired intangible assets 16 17 Other assets 209 191 Total assets $9,362 $8,050 LIABILITIES AND SHAREHOLDERS' EQUITY: Current liabilities: Accounts payable $1,737 $1,451 Accrued expenses 1,487 1,200 Total current liabilities 3,224 2,651 Deferred tax liabilities and other non-current liabilities 348 323 Total liabilities 3,572 2,974 Commitments and contingencies Shareholders' equity: Common stock, no par value; 900,000,000 shares authorized; 404,549,022 and 391,443,617 shares issued and outstanding, respectively 2,911 2,514 Deferred stock compensation (83) (93) Retained earnings 2,965 2,670 Accumulated other comprehensive income (loss) (3) (15) Total shareholders' equity 5,790 5,076 Total liabilities and shareholders' equity $9,362 $8,050 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except share and per share amounts) THREE MONTHS ENDED Dec. 25, Dec. 27, 2004 2003 Net sales $3,490 $2,006 Cost of sales 2,494 1,470 Gross margin 996 536 Operating expenses: Research and development 123 119 Selling, general, and administrative 470 343 Total operating expenses 593 462 Operating income 403 74 Other income and expense: Gains on non-current investments — 4 Interest and other income, net 26 9 Total other income and expense 26 13 Income before provision for income taxes 429 87 Provision for income taxes 134 24 Net income $295 $63 Earnings per common share: Basic $0.75 $0.17 Diluted $0.70 $0.17 Shares used in computing earnings per share (in thousands): Basic 394,516 362,450 Diluted 419,087 372,308 Apple Computer, Inc. Q105 Unaudited Summary Data Q404 Actual Q104 Actual Q105 Actual CPU Rev CPU Rev CPU Rev Operating Segments Units k $m Units k $m Units k $m Americas 471 $1,196 378 $924 476 $1,637 Europe 155 423 240 519 320 847 Japan 56 175 77 157 64 185 Retail 98 376 73 273 119 561 Other Segments (1) 56 180 61 133 67 260 Total Operating Segments 836 $2,350 829 $2,006 1,046 $3,490 Units Rev Units Rev Units Rev k $m k $m k $m Product Summary iMac (2) 229 $216 227 $251 456 $620 iBook 238 256 201 221 271 297 Power Mac (3) 156 340 206 398 167 381 PowerBook 213 419 195 399 152 307 Subtotal CPUs 836 1,231 829 1,269 1,046 1,605 iPod 2,016 537 733 256 4,580 1,211 Other Music Products (4) NM 98 NM 47 NM 177 Peripherals & Other HW NM 271 NM 222 NM 284 Software & Other NM 213 NM 212 NM 213 Total Apple $2,350 $2,006 $3,490 Sequential Change Year/Year Change Operating Segments Units Revenue Units Revenue Americas 1% 37% 26% 77% Europe 106% 100% 33% 63% Japan 14% 6% -17% 18% Retail 21% 49% 63% 105% Other Segments (1) 20% 44% 10% 95% Total Operating Segments 25% 49% 26% 74% Sequential Change Year/Year Change Units Revenue Units Revenue Product Summary iMac (2) 99% 187% 101% 147% iBook 14% 16% 35% 34% Power Mac (3) 7% 12% -19% -4% PowerBook -29% -27% -22% -23% Subtotal CPUs 25% 30% 26% 26% iPod 127% 126% 525% 373% Other Music Products (4) NM 81% NM 277% Peripherals & Other HW NM 5% NM 28% Software & Other NM 0% NM 0% Total Apple 49% 74% (1) Other Segments include Asia Pacific and FileMaker. (2) Includes eMac product line. (3) Includes Xserve product line. (4) Other Music Products consists of iTunes Music Store sales and iPod related services and accessories. NM: Not Meaningful .

SOURCE Apple Computer, Inc.