Apple (AAPL)

In the fourth quarter of 2004, the Company began incurring substantial development costs associated with Mac OS X version 10.4 Tiger subsequent to achievement of technological feasibility as evidenced by public demonstration in August 2004 and the subsequent release of a developer beta version of the product. During the first and second quarters of 2005, the Company capitalized approximately $14.8 million and $14.7 million, respectively, of costs associated with the development of Tiger. In accordance with SFAS No. 86, amortization of this asset to cost of sales began in April 2005 when the Company began shipping Tiger and is being recognized on a straight-line basis over a three-year estimated useful life.

In the fourth quarter of 2004, the Company began incurring substantial development costs associated with Mac OS X version 10.4 Tiger subsequent to achievement of technological feasibility as evidenced by public demonstration in August 2004 and the subsequent release of a developer beta version of the product. During the first quarter of 2005, the Company capitalized approximately $14.8 million of costs associated with the development of Tiger.  In accordance with SFAS No. 86, amortization of this asset to cost of sales began in April 2005 when the Company began shipping Tiger and is being recognized on a straight-line basis over a three-year estimated useful life.

In the fourth quarter of 2004, the Company began incurring substantial development costs associated with Mac OS X version 10.4 Tiger subsequent to achievement of technological feasibility as evidenced by public demonstration in August 2004 and the subsequent release of a developer beta version of the product. The Company capitalized approximately $29.7 and $4.5 million during 2005 and 2004, respectively, of costs associated with the development of Tiger. In accordance with SFAS No. 86, amortization of this asset to cost of sales began in April 2005 when the Company began shipping Tiger and is being recognized on a straight-line basis over a 3 year estimated useful life.

During the second quarter of 2004, the Company incurred substantial development costs associated with FileMaker Pro 7 subsequent to achievement of technological feasibility as evidenced by public demonstration and release of a developer beta version, and prior to the release of the final version of the product in March 2004. Therefore, during the second quarter of 2004, the Company capitalized approximately $2.3 million of costs associated with the development of FileMaker Pro 7. In accordance with SFAS No. 86, amortization of this asset to cost of sales began in March 2004 when the Company began shipping FileMaker Pro 7 and is being recognized on a straight-line basis over a 3 year estimated useful life.

During the third and fourth quarters of 2003, the Company incurred substantial development costs associated with the development of Mac OS X version 10.3 (code-named “Panther”), subsequent to achievement of technological feasibility as evidenced by public demonstration and release of a developer beta in June 2003, and prior to release of the final version of the product in the first quarter of 2004. Therefore, during 2003 the Company capitalized approximately $14.7 million of development costs associated with the development of Panther. Amortization of this asset began in the first quarter of 2004 when Panther was shipped and is being recognized on a straight-line basis in accordance with SFAS No. 86 over a 3 year estimated useful life.

Total amortization related to capitalized software development costs was $15.7 million, $10.7 million, and $5.8 million in 2005, 2004, and 2003, respectively.

In the fourth quarter of 2004, the Company began
incurring substantial development costs associated with Mac OS X version 10.4
Tiger subsequent to achievement of technological feasibility as evidenced by
public demonstration in August 2004 and the subsequent release of a
developer beta version of the product. The Company capitalized approximately
$29.7 and $4.5 million during 2005 and 2004, respectively, of costs associated
with the development of Tiger. In accordance with SFAS No. 86, amortization
of this asset to cost of sales began in April 2005 when the Company began
shipping Tiger and is being recognized on a straight-line basis over a 3 year
estimated useful life.

During the second quarter of 2004, the Company
incurred substantial development costs associated with FileMaker Pro 7
subsequent to achievement of technological feasibility as evidenced by public
demonstration and release of a developer beta version, and prior to the release
of the final version of the product in March 2004. Therefore, during the
second quarter of 2004, the Company capitalized approximately $2.3 million of
costs associated with the development of FileMaker Pro 7. In accordance with
SFAS No. 86, amortization of this asset to cost of sales began in March 2004
when the Company began shipping FileMaker Pro 7 and is being recognized on a
straight-line basis over a 3 year estimated useful life.

During the third and fourth quarters of 2003, the
Company incurred substantial development costs associated with the development
of Mac OS X version 10.3 (code-named “Panther”), subsequent to achievement of
technological feasibility as evidenced by public demonstration and release of a
developer beta in June 2003, and prior to release of the final version of
the product in the first quarter of 2004. Therefore, during 2003 the Company
capitalized approximately $14.7 million of development costs associated with
the development of Panther. Amortization of this asset began in the first
quarter of 2004 when Panther was shipped and is being recognized on a
straight-line basis in accordance with SFAS No. 86 over a 3 year estimated
useful life.

Total amortization related
to capitalized software development costs was $15.7 million, $10.7 million, and
$5.8 million in 2005, 2004, and 2003, respectively.

In the fourth quarter of 2004, the Company began incurring substantial development costs associated with Mac OS X version 10.4 Tiger subsequent to achievement of technological feasibility as evidenced by public demonstration in August 2004 and the subsequent release of a developer beta version of the product. Therefore, during the third, second, and first quarters of 2005 and the fourth quarter of 2004, the Company capitalized approximately $0.2 million, $14.7 million, $14.8 million and $4.5 million, respectively, of costs associated with the development of Tiger.  In accordance with SFAS No. 86, amortization of this asset to cost of sales began in April 2005 when the Company began shipping Tiger and is being recognized on a straight-line basis over a 3 year estimated useful life.

During the second quarter of 2004, the Company incurred substantial development costs associated with FileMaker Pro 7 subsequent to achievement of technological feasibility as evidenced by public demonstration and release of a developer beta version, and prior to the release of the final version of the product in March 2004. Therefore, during the second quarter of 2004, the Company capitalized approximately $2.3 million of costs associated with the

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In the fourth quarter of 2004, the Company began incurring substantial development costs associated with the latest version of Mac OS X (code-named “Tiger”) subsequent to achievement of technological feasibility as evidenced by public demonstration in August 2004 and the subsequent release of a developer beta version of the product. Therefore, during the second quarter and first quarter of 2005 and the fourth quarter of 2004, the Company capitalized approximately $14.7 million, $14.8 million and $4.5 million, respectively, of costs associated with the development of Tiger.  Amortization of this asset to cost of sales will commence when Tiger begins shipping and will be recognized on a straight-line basis over a 3 year estimated useful life.  The final version of the product was released in April 2005.

During the second quarter of 2004, the Company incurred substantial development costs associated with FileMaker Pro 7 subsequent to achievement of technological feasibility as evidenced by public demonstration and release of a developer beta version, and prior to the release of the final version of the product in March 2004. Therefore, during

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In the fourth quarter of 2004, the Company began incurring substantial development costs associated with the upcoming upgrade of Mac OS X version 10.4 (code-named “Tiger”).  Tiger enhances the features and functionality of the previous version of Mac OS X. Tiger achieved technological feasibility following its public demonstration in August 2004 and the subsequent release of a developer beta version of the product. Therefore, during the first quarter of 2005 and the fourth quarter of 2004, the Company capitalized approximately $14.8 million and $4.5 million, respectively, of costs associated with the development of Tiger.  Amortization of this asset will commence when Tiger begins shipping and will be recognized on a straight-line basis over a 3 year estimated useful life.  The planned release of the final version of the product is expected in the first half of calendar year 2005.