California | 001-36743 | 94-2404110 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS. Employer Identification No.) |
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
Item 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits. |
Exhibit Number | Exhibit Description | |
99.1 | Press release issued by Apple Inc. on August 1, 2017. | |
99.2 | Data sheet issued by Apple Inc. on August 1, 2017. |
Date: | August 1, 2017 | Apple Inc. | |||
By: | /s/ Luca Maestri | ||||
Luca Maestri Senior Vice President, Chief Financial Officer |
Exhibit Number | Exhibit Description | |
99.1 | Press release issued by Apple Inc. on August 1, 2017. | |
99.2 | Data sheet issued by Apple Inc. on August 1, 2017. |
• | revenue between $49 billion and $52 billion |
• | gross margin between 37.5 percent and 38 percent |
• | operating expenses between $6.7 billion and $6.8 billion |
• | other income/(expense) of $500 million |
• | tax rate of 25.5 percent |
Three Months Ended | Nine Months Ended | ||||||||||||||
July 1, 2017 | June 25, 2016 | July 1, 2017 | June 25, 2016 | ||||||||||||
Net sales | $ | 45,408 | $ | 42,358 | $ | 176,655 | $ | 168,787 | |||||||
Cost of sales (1) | 27,920 | 26,252 | 108,400 | 102,337 | |||||||||||
Gross margin | 17,488 | 16,106 | 68,255 | 66,450 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development (1) | 2,937 | 2,560 | 8,584 | 7,475 | |||||||||||
Selling, general and administrative (1) | 3,783 | 3,441 | 11,447 | 10,712 | |||||||||||
Total operating expenses | 6,720 | 6,001 | 20,031 | 18,187 | |||||||||||
Operating income | 10,768 | 10,105 | 48,224 | 48,263 | |||||||||||
Other income/(expense), net | 540 | 364 | 1,948 | 921 | |||||||||||
Income before provision for income taxes | 11,308 | 10,469 | 50,172 | 49,184 | |||||||||||
Provision for income taxes | 2,591 | 2,673 | 12,535 | 12,511 | |||||||||||
Net income | $ | 8,717 | $ | 7,796 | $ | 37,637 | $ | 36,673 | |||||||
Earnings per share: | |||||||||||||||
Basic | $ | 1.68 | $ | 1.43 | $ | 7.18 | $ | 6.66 | |||||||
Diluted | $ | 1.67 | $ | 1.42 | $ | 7.14 | $ | 6.62 | |||||||
Shares used in computing earnings per share: | |||||||||||||||
Basic | 5,195,088 | 5,443,058 | 5,239,847 | 5,505,456 | |||||||||||
Diluted | 5,233,499 | 5,472,781 | 5,274,394 | 5,535,931 | |||||||||||
Cash dividends declared per share | $ | 0.63 | $ | 0.57 | $ | 1.77 | $ | 1.61 | |||||||
(1) Includes share-based compensation expense as follows: | |||||||||||||||
Cost of sales | $ | 216 | $ | 188 | $ | 662 | $ | 583 | |||||||
Research and development | $ | 566 | $ | 479 | $ | 1,730 | $ | 1,413 | |||||||
Selling, general and administrative | $ | 411 | $ | 387 | $ | 1,274 | $ | 1,184 |
July 1, 2017 | September 24, 2016 | ||||||
ASSETS: | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 18,571 | $ | 20,484 | |||
Short-term marketable securities | 58,188 | 46,671 | |||||
Accounts receivable, less allowances of $55 and $53, respectively | 12,399 | 15,754 | |||||
Inventories | 3,146 | 2,132 | |||||
Vendor non-trade receivables | 10,233 | 13,545 | |||||
Other current assets | 10,338 | 8,283 | |||||
Total current assets | 112,875 | 106,869 | |||||
Long-term marketable securities | 184,757 | 170,430 | |||||
Property, plant and equipment, net | 29,286 | 27,010 | |||||
Goodwill | 5,661 | 5,414 | |||||
Acquired intangible assets, net | 2,444 | 3,206 | |||||
Other non-current assets | 10,150 | 8,757 | |||||
Total assets | $ | 345,173 | $ | 321,686 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY: | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 31,915 | $ | 37,294 | |||
Accrued expenses | 23,304 | 22,027 | |||||
Deferred revenue | 7,608 | 8,080 | |||||
Commercial paper | 11,980 | 8,105 | |||||
Current portion of long-term debt | 6,495 | 3,500 | |||||
Total current liabilities | 81,302 | 79,006 | |||||
Deferred revenue, non-current | 2,984 | 2,930 | |||||
Long-term debt | 89,864 | 75,427 | |||||
Other non-current liabilities | 38,598 | 36,074 | |||||
Total liabilities | 212,748 | 193,437 | |||||
Commitments and contingencies | |||||||
Shareholders’ equity: | |||||||
Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 5,169,782 and 5,336,166 shares issued and outstanding, respectively | 34,445 | 31,251 | |||||
Retained earnings | 98,525 | 96,364 | |||||
Accumulated other comprehensive income/(loss) | (545 | ) | 634 | ||||
Total shareholders’ equity | 132,425 | 128,249 | |||||
Total liabilities and shareholders’ equity | $ | 345,173 | $ | 321,686 |
Nine Months Ended | |||||||
July 1, 2017 | June 25, 2016 | ||||||
Cash and cash equivalents, beginning of the period | $ | 20,484 | $ | 21,120 | |||
Operating activities: | |||||||
Net income | 37,637 | 36,673 | |||||
Adjustments to reconcile net income to cash generated by operating activities: | |||||||
Depreciation and amortization | 7,673 | 7,957 | |||||
Share-based compensation expense | 3,666 | 3,180 | |||||
Deferred income tax expense | 4,764 | 5,191 | |||||
Other | (142 | ) | 419 | ||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable, net | 3,381 | 4,623 | |||||
Inventories | (1,014 | ) | 518 | ||||
Vendor non-trade receivables | 3,312 | 6,166 | |||||
Other current and non-current assets | (3,229 | ) | 1,049 | ||||
Accounts payable | (5,212 | ) | (9,567 | ) | |||
Deferred revenue | (418 | ) | (1,148 | ) | |||
Other current and non-current liabilities | (2,476 | ) | (5,363 | ) | |||
Cash generated by operating activities | 47,942 | 49,698 | |||||
Investing activities: | |||||||
Purchases of marketable securities | (123,781 | ) | (112,068 | ) | |||
Proceeds from maturities of marketable securities | 19,347 | 14,915 | |||||
Proceeds from sales of marketable securities | 76,747 | 69,926 | |||||
Payments made in connection with business acquisitions, net | (248 | ) | (146 | ) | |||
Payments for acquisition of property, plant and equipment | (8,586 | ) | (8,757 | ) | |||
Payments for acquisition of intangible assets | (209 | ) | (753 | ) | |||
Payments for strategic investments, net | (87 | ) | (1,376 | ) | |||
Other | 313 | (321 | ) | ||||
Cash used in investing activities | (36,504 | ) | (38,580 | ) | |||
Financing activities: | |||||||
Proceeds from issuance of common stock | 274 | 247 | |||||
Excess tax benefits from equity awards | 534 | 391 | |||||
Payments for taxes related to net share settlement of equity awards | (1,646 | ) | (1,361 | ) | |||
Payments for dividends and dividend equivalents | (9,499 | ) | (9,058 | ) | |||
Repurchases of common stock | (25,105 | ) | (23,696 | ) | |||
Proceeds from issuance of term debt, net | 21,725 | 17,984 | |||||
Repayments of term debt | (3,500 | ) | (2,500 | ) | |||
Change in commercial paper, net | 3,866 | 3,992 | |||||
Cash used in financing activities | (13,351 | ) | (14,001 | ) | |||
Increase/(Decrease) in cash and cash equivalents | (1,913 | ) | (2,883 | ) | |||
Cash and cash equivalents, end of the period | $ | 18,571 | $ | 18,237 | |||
Supplemental cash flow disclosure: | |||||||
Cash paid for income taxes, net | $ | 9,752 | $ | 8,990 | |||
Cash paid for interest | $ | 1,456 | $ | 892 |
Exhibit 99.2 | |||||||||||||||||||||||||||||||||
Apple Inc. | |||||||||||||||||||||||||||||||||
Q3 2017 Unaudited Summary Data | |||||||||||||||||||||||||||||||||
(Units in thousands, Revenue in millions) | |||||||||||||||||||||||||||||||||
Q3 2017 | Q2 2017 | Q3 2016 | Sequential Change | Year/Year Change | |||||||||||||||||||||||||||||
Revenue | Revenue | Revenue | Revenue | Revenue | |||||||||||||||||||||||||||||
Operating Segments | |||||||||||||||||||||||||||||||||
Americas | $ | 20,376 | $ | 21,157 | $ | 17,963 | -4 | % | 13 | % | |||||||||||||||||||||||
Europe | 10,675 | 12,733 | 9,643 | -16 | % | 11 | % | ||||||||||||||||||||||||||
Greater China | 8,004 | 10,726 | 8,848 | -25 | % | -10 | % | ||||||||||||||||||||||||||
Japan | 3,624 | 4,485 | 3,529 | -19 | % | 3 | % | ||||||||||||||||||||||||||
Rest of Asia Pacific | 2,729 | 3,795 | 2,375 | -28 | % | 15 | % | ||||||||||||||||||||||||||
Total Apple | $ | 45,408 | $ | 52,896 | $ | 42,358 | -14 | % | 7 | % | |||||||||||||||||||||||
Q3 2017 | Q2 2017 | Q3 2016 | Sequential Change | Year/Year Change | |||||||||||||||||||||||||||||
Units | Revenue | Units | Revenue | Units | Revenue | Units | Revenue | Units | Revenue | ||||||||||||||||||||||||
Product Summary | |||||||||||||||||||||||||||||||||
iPhone (1) | 41,026 | $ | 24,846 | 50,763 | $ | 33,249 | 40,399 | $ | 24,048 | -19 | % | -25 | % | 2 | % | 3 | % | ||||||||||||||||
iPad (1) | 11,424 | 4,969 | 8,922 | 3,889 | 9,950 | 4,876 | 28 | % | 28 | % | 15 | % | 2 | % | |||||||||||||||||||
Mac (1) | 4,292 | 5,592 | 4,199 | 5,844 | 4,252 | 5,239 | 2 | % | -4 | % | 1 | % | 7 | % | |||||||||||||||||||
Services (2) | 7,266 | 7,041 | 5,976 | 3 | % | 22 | % | ||||||||||||||||||||||||||
Other Products (1)(3) | 2,735 | 2,873 | 2,219 | -5 | % | 23 | % | ||||||||||||||||||||||||||
Total Apple | $ | 45,408 | $ | 52,896 | $ | 42,358 | -14 | % | 7 | % | |||||||||||||||||||||||
(1) | Includes deferrals and amortization of related software upgrade rights and non-software services. | ||||||||||||||||||||||||||||||||
(2) | Includes revenue from Digital Content and Services, AppleCare, Apple Pay, licensing and other services. | ||||||||||||||||||||||||||||||||
(3) | Includes sales of Apple TV, Apple Watch, Beats products, iPod and Apple-branded and third-party accessories. |