California | 001-36743 | 94-2404110 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. 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)) |
(d) | Exhibits. |
Exhibit Number | Exhibit Description | |
99.1 | ||
99.2 |
Date: | November 1, 2018 | Apple Inc. | |||
By: | /s/ Luca Maestri | ||||
Luca Maestri | |||||
Senior Vice President, Chief Financial Officer |
• | revenue between $89 billion and $93 billion |
• | gross margin between 38 percent and 38.5 percent |
• | operating expenses between $8.7 billion and $8.8 billion |
• | other income/(expense) of $300 million |
• | tax rate of approximately 16.5 percent before discrete items |
Three Months Ended | Twelve Months Ended | ||||||||||||||
September 29, 2018 | September 30, 2017 | September 29, 2018 | September 30, 2017 | ||||||||||||
Net sales | $ | 62,900 | $ | 52,579 | $ | 265,595 | $ | 229,234 | |||||||
Cost of sales (1) | 38,816 | 32,648 | 163,756 | 141,048 | |||||||||||
Gross margin | 24,084 | 19,931 | 101,839 | 88,186 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development (1) | 3,750 | 2,997 | 14,236 | 11,581 | |||||||||||
Selling, general and administrative (1) | 4,216 | 3,814 | 16,705 | 15,261 | |||||||||||
Total operating expenses | 7,966 | 6,811 | 30,941 | 26,842 | |||||||||||
Operating income | 16,118 | 13,120 | 70,898 | 61,344 | |||||||||||
Other income/(expense), net | 303 | 797 | 2,005 | 2,745 | |||||||||||
Income before provision for income taxes | 16,421 | 13,917 | 72,903 | 64,089 | |||||||||||
Provision for income taxes | 2,296 | 3,203 | 13,372 | 15,738 | |||||||||||
Net income | $ | 14,125 | $ | 10,714 | $ | 59,531 | $ | 48,351 | |||||||
Earnings per share: | |||||||||||||||
Basic | $ | 2.94 | $ | 2.08 | $ | 12.01 | $ | 9.27 | |||||||
Diluted | $ | 2.91 | $ | 2.07 | $ | 11.91 | $ | 9.21 | |||||||
Shares used in computing earnings per share: | |||||||||||||||
Basic | 4,801,589 | 5,149,428 | 4,955,377 | 5,217,242 | |||||||||||
Diluted | 4,847,547 | 5,183,585 | 5,000,109 | 5,251,692 | |||||||||||
Cash dividends declared per share | $ | 0.73 | $ | 0.63 | $ | 2.72 | $ | 2.40 | |||||||
(1) Includes share-based compensation expense as follows: | |||||||||||||||
Cost of sales | $ | 251 | $ | 215 | $ | 1,010 | $ | 877 | |||||||
Research and development | $ | 681 | $ | 569 | $ | 2,668 | $ | 2,299 | |||||||
Selling, general and administrative | $ | 413 | $ | 390 | $ | 1,662 | $ | 1,664 |
September 29, 2018 | September 30, 2017 | ||||||
ASSETS: | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 25,913 | $ | 20,289 | |||
Marketable securities | 40,388 | 53,892 | |||||
Accounts receivable, net | 23,186 | 17,874 | |||||
Inventories | 3,956 | 4,855 | |||||
Vendor non-trade receivables | 25,809 | 17,799 | |||||
Other current assets | 12,087 | 13,936 | |||||
Total current assets | 131,339 | 128,645 | |||||
Non-current assets: | |||||||
Marketable securities | 170,799 | 194,714 | |||||
Property, plant and equipment, net | 41,304 | 33,783 | |||||
Other non-current assets | 22,283 | 18,177 | |||||
Total non-current assets | 234,386 | 246,674 | |||||
Total assets | $ | 365,725 | $ | 375,319 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY: | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 55,888 | $ | 44,242 | |||
Other current liabilities | 32,687 | 30,551 | |||||
Deferred revenue | 7,543 | 7,548 | |||||
Commercial paper | 11,964 | 11,977 | |||||
Term debt | 8,784 | 6,496 | |||||
Total current liabilities | 116,866 | 100,814 | |||||
Non-current liabilities: | |||||||
Deferred revenue | 2,797 | 2,836 | |||||
Term debt | 93,735 | 97,207 | |||||
Other non-current liabilities | 45,180 | 40,415 | |||||
Total non-current liabilities | 141,712 | 140,458 | |||||
Total liabilities | 258,578 | 241,272 | |||||
Commitments and contingencies | |||||||
Shareholders’ equity: | |||||||
Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 4,754,986 and 5,126,201 shares issued and outstanding, respectively | 40,201 | 35,867 | |||||
Retained earnings | 70,400 | 98,330 | |||||
Accumulated other comprehensive income/(loss) | (3,454 | ) | (150 | ) | |||
Total shareholders’ equity | 107,147 | 134,047 | |||||
Total liabilities and shareholders’ equity | $ | 365,725 | $ | 375,319 |
Twelve Months Ended | |||||||
September 29, 2018 | September 30, 2017 | ||||||
Cash and cash equivalents, beginning of the period | $ | 20,289 | $ | 20,484 | |||
Operating activities: | |||||||
Net income | 59,531 | 48,351 | |||||
Adjustments to reconcile net income to cash generated by operating activities: | |||||||
Depreciation and amortization | 10,903 | 10,157 | |||||
Share-based compensation expense | 5,340 | 4,840 | |||||
Deferred income tax expense/(benefit) | (32,590 | ) | 5,966 | ||||
Other | (444 | ) | (166 | ) | |||
Changes in operating assets and liabilities: | |||||||
Accounts receivable, net | (5,322 | ) | (2,093 | ) | |||
Inventories | 828 | (2,723 | ) | ||||
Vendor non-trade receivables | (8,010 | ) | (4,254 | ) | |||
Other current and non-current assets | (423 | ) | (5,318 | ) | |||
Accounts payable | 9,175 | 8,966 | |||||
Deferred revenue | (44 | ) | (626 | ) | |||
Other current and non-current liabilities | 38,490 | 1,125 | |||||
Cash generated by operating activities | 77,434 | 64,225 | |||||
Investing activities: | |||||||
Purchases of marketable securities | (71,356 | ) | (159,486 | ) | |||
Proceeds from maturities of marketable securities | 55,881 | 31,775 | |||||
Proceeds from sales of marketable securities | 47,838 | 94,564 | |||||
Payments for acquisition of property, plant and equipment | (13,313 | ) | (12,451 | ) | |||
Payments made in connection with business acquisitions, net | (721 | ) | (329 | ) | |||
Purchases of non-marketable securities | (1,871 | ) | (521 | ) | |||
Proceeds from non-marketable securities | 353 | 126 | |||||
Other | (745 | ) | (124 | ) | |||
Cash generated by/(used in) investing activities | 16,066 | (46,446 | ) | ||||
Financing activities: | |||||||
Proceeds from issuance of common stock | 669 | 555 | |||||
Payments for taxes related to net share settlement of equity awards | (2,527 | ) | (1,874 | ) | |||
Payments for dividends and dividend equivalents | (13,712 | ) | (12,769 | ) | |||
Repurchases of common stock | (72,738 | ) | (32,900 | ) | |||
Proceeds from issuance of term debt, net | 6,969 | 28,662 | |||||
Repayments of term debt | (6,500 | ) | (3,500 | ) | |||
Change in commercial paper, net | (37 | ) | 3,852 | ||||
Cash used in financing activities | (87,876 | ) | (17,974 | ) | |||
Increase/(Decrease) in cash and cash equivalents | 5,624 | (195 | ) | ||||
Cash and cash equivalents, end of the period | $ | 25,913 | $ | 20,289 | |||
Supplemental cash flow disclosure: | |||||||
Cash paid for income taxes, net | $ | 10,417 | $ | 11,591 | |||
Cash paid for interest | $ | 3,022 | $ | 2,092 |
Exhibit 99.2 | |||||||||||||||||||||||||||||||||
Apple Inc. | |||||||||||||||||||||||||||||||||
Q4 2018 Unaudited Summary Data | |||||||||||||||||||||||||||||||||
(Units in thousands, Revenue in millions) | |||||||||||||||||||||||||||||||||
Q4 2018 | Q3 2018 | Q4 2017 | Sequential Change | Year/Year Change | |||||||||||||||||||||||||||||
Revenue | Revenue | Revenue | Revenue | Revenue | |||||||||||||||||||||||||||||
Reportable Segments | |||||||||||||||||||||||||||||||||
Americas | $ | 27,517 | $ | 24,542 | $ | 23,099 | 12 | % | 19 | % | |||||||||||||||||||||||
Europe | 15,382 | 12,138 | 13,009 | 27 | % | 18 | % | ||||||||||||||||||||||||||
Greater China | 11,411 | 9,551 | 9,801 | 19 | % | 16 | % | ||||||||||||||||||||||||||
Japan | 5,161 | 3,867 | 3,858 | 33 | % | 34 | % | ||||||||||||||||||||||||||
Rest of Asia Pacific | 3,429 | 3,167 | 2,812 | 8 | % | 22 | % | ||||||||||||||||||||||||||
Total Apple | $ | 62,900 | $ | 53,265 | $ | 52,579 | 18 | % | 20 | % | |||||||||||||||||||||||
Q4 2018 | Q3 2018 | Q4 2017 | Sequential Change | Year/Year Change | |||||||||||||||||||||||||||||
Units | Revenue | Units | Revenue | Units | Revenue | Units | Revenue | Units | Revenue | ||||||||||||||||||||||||
Product Summary | |||||||||||||||||||||||||||||||||
iPhone (1) | 46,889 | $ | 37,185 | 41,300 | $ | 29,906 | 46,677 | $ | 28,846 | 14 | % | 24 | % | 0 | % | 29 | % | ||||||||||||||||
iPad (1) | 9,699 | 4,089 | 11,553 | 4,741 | 10,326 | 4,831 | -16 | % | -14 | % | -6 | % | -15 | % | |||||||||||||||||||
Mac (1) | 5,299 | 7,411 | 3,720 | 5,330 | 5,386 | 7,170 | 42 | % | 39 | % | -2 | % | 3 | % | |||||||||||||||||||
Services (2) | 9,981 | 9,548 | 8,501 | 5 | % | 17 | % | ||||||||||||||||||||||||||
Other Products (1)(3) | 4,234 | 3,740 | 3,231 | 13 | % | 31 | % | ||||||||||||||||||||||||||
Total Apple | $ | 62,900 | $ | 53,265 | $ | 52,579 | 18 | % | 20 | % | |||||||||||||||||||||||
(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. Services net sales in the third quarter of 2018 included a favorable one-time item of $236 million in connection with the final resolution of various lawsuits. Services net sales in the fourth quarter of 2017 included a favorable one-time adjustment of $640 million due to a change in estimate based on the availability of additional supporting information. | ||||||||||||||||||||||||||||||||
(3) | Includes sales of AirPods, Apple TV, Apple Watch, Beats products, HomePod, iPod touch and other Apple-branded and third-party accessories. |