0000320193-22-000059.txt : 20220429 0000320193-22-000059.hdr.sgml : 20220429 20220428180358 ACCESSION NUMBER: 0000320193-22-000059 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 63 CONFORMED PERIOD OF REPORT: 20220326 FILED AS OF DATE: 20220429 DATE AS OF CHANGE: 20220428 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Apple Inc. CENTRAL INDEX KEY: 0000320193 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPUTERS [3571] IRS NUMBER: 942404110 STATE OF INCORPORATION: CA FISCAL YEAR END: 0924 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-36743 FILM NUMBER: 22868650 BUSINESS ADDRESS: STREET 1: ONE APPLE PARK WAY CITY: CUPERTINO STATE: CA ZIP: 95014 BUSINESS PHONE: (408) 996-1010 MAIL ADDRESS: STREET 1: ONE APPLE PARK WAY CITY: CUPERTINO STATE: CA ZIP: 95014 FORMER COMPANY: FORMER CONFORMED NAME: APPLE INC DATE OF NAME CHANGE: 20070109 FORMER COMPANY: FORMER CONFORMED NAME: APPLE COMPUTER INC DATE OF NAME CHANGE: 19970808 10-Q 1 aapl-20220326.htm 10-Q aapl-20220326
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 26, 2022
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             .
Commission File Number: 001-36743
aapl-20220326_g1.jpg
Apple Inc.
(Exact name of Registrant as specified in its charter)
California94-2404110
(State or other jurisdiction
of incorporation or organization)		(I.R.S. Employer Identification No.)
One Apple Park Way
Cupertino, California
95014
(Address of principal executive offices)(Zip Code)
(408) 996-1010
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbol(s)
Name of each exchange on which registered
Common Stock, $0.00001 par value per share
AAPL
The Nasdaq Stock Market LLC
1.000% Notes due 2022
—
The Nasdaq Stock Market LLC
1.375% Notes due 2024
—
The Nasdaq Stock Market LLC
0.000% Notes due 2025
—
The Nasdaq Stock Market LLC
0.875% Notes due 2025
—
The Nasdaq Stock Market LLC
1.625% Notes due 2026
—
The Nasdaq Stock Market LLC
2.000% Notes due 2027
—
The Nasdaq Stock Market LLC
1.375% Notes due 2029
—
The Nasdaq Stock Market LLC
3.050% Notes due 2029
—
The Nasdaq Stock Market LLC
0.500% Notes due 2031
—
The Nasdaq Stock Market LLC
3.600% Notes due 2042
—
The Nasdaq Stock Market LLC
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes  ☒     No  ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).
Yes  ☒     No  ☐
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒Accelerated filer☐
Non-accelerated filer☐Smaller reporting company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes  ☐     No  ☒
16,185,181,000 shares of common stock were issued and outstanding as of April 15, 2022.


Apple Inc.

Form 10-Q
For the Fiscal Quarter Ended March 26, 2022
TABLE OF CONTENTS



PART I — FINANCIAL INFORMATION
Item 1.    Financial Statements
Apple Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In millions, except number of shares which are reflected in thousands and per share amounts)

Three Months EndedSix Months Ended
March 26,
2022		March 27,
2021		March 26,
2022		March 27,
2021
Net sales:
   Products$77,457 $72,683 $181,886 $168,361 
   Services19,821 16,901 39,337 32,662 
Total net sales97,278 89,584 221,223 201,023 
Cost of sales:
   Products49,290 46,447 113,599 108,577 
   Services5,429 5,058 10,822 10,039 
Total cost of sales54,719 51,505 124,421 118,616 
Gross margin42,559 38,079 96,802 82,407 
Operating expenses:
Research and development6,387 5,262 12,693 10,425 
Selling, general and administrative6,193 5,314 12,642 10,945 
Total operating expenses12,580 10,576 25,335 21,370 
Operating income29,979 27,503 71,467 61,037 
Other income/(expense), net160 508 (87)553 
Income before provision for income taxes30,139 28,011 71,380 61,590 
Provision for income taxes5,129 4,381 11,740 9,205 
Net income$25,010 $23,630 $59,640 $52,385 
Earnings per share:
Basic$1.54 $1.41 $3.65 $3.11 
Diluted$1.52 $1.40 $3.62 $3.08 
Shares used in computing earnings per share:
Basic16,278,802 16,753,476 16,335,263 16,844,298 
Diluted16,403,316 16,929,157 16,461,304 17,021,423 
See accompanying Notes to Condensed Consolidated Financial Statements.
Apple Inc. | Q2 2022 Form 10-Q | 1

Apple Inc.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
(In millions)

Three Months EndedSix Months Ended
March 26,
2022		March 27,
2021		March 26,
2022		March 27,
2021
Net income
$25,010 $23,630 $59,640 $52,385 
Other comprehensive income/(loss):
Change in foreign currency translation, net of tax
(21)(78)(381)471 
Change in unrealized gains/losses on derivative instruments, net of tax:
Change in fair value of derivative instruments334 332 696 28 
Adjustment for net (gains)/losses realized and included in net income
(301)759 (208)576 
Total change in unrealized gains/losses on derivative instruments
33 1,091 488 604 
Change in unrealized gains/losses on marketable debt securities, net of tax:
Change in fair value of marketable debt securities
(5,633)(1,403)(6,809)(775)
Adjustment for net (gains)/losses realized and included in net income
54 (75)45 (180)
Total change in unrealized gains/losses on marketable debt securities
(5,579)(1,478)(6,764)(955)
Total other comprehensive income/(loss)(5,567)(465)(6,657)120 
Total comprehensive income$19,443 $23,165 $52,983 $52,505 
See accompanying Notes to Condensed Consolidated Financial Statements.
Apple Inc. | Q2 2022 Form 10-Q | 2

Apple Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In millions, except number of shares which are reflected in thousands and par value)

March 26,
2022		September 25,
2021
ASSETS:
Current assets:
Cash and cash equivalents$28,098 $34,940 
Marketable securities23,413 27,699 
Accounts receivable, net20,815 26,278 
Inventories5,460 6,580 
Vendor non-trade receivables24,585 25,228 
Other current assets15,809 14,111 
Total current assets118,180 134,836 
Non-current assets:
Marketable securities141,219 127,877 
Property, plant and equipment, net39,304 39,440 
Other non-current assets51,959 48,849 
Total non-current assets
232,482 216,166 
Total assets
$350,662 $351,002 
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
Accounts payable$52,682 $54,763 
Other current liabilities50,248 47,493 
Deferred revenue7,920 7,612 
Commercial paper6,999 6,000 
Term debt9,659 9,613 
Total current liabilities127,508 125,481 
Non-current liabilities:
Term debt
103,323 109,106 
Other non-current liabilities
52,432 53,325 
Total non-current liabilities
155,755 162,431 
Total liabilities
283,263 287,912 
Commitments and contingencies
Shareholders’ equity:
Common stock and additional paid-in capital, $0.00001 par value: 50,400,000 shares authorized; 16,207,568 and 16,426,786 shares issued and outstanding, respectively
61,181 57,365 
Retained earnings12,712 5,562 
Accumulated other comprehensive income/(loss)(6,494)163 
Total shareholders’ equity67,399 63,090 
Total liabilities and shareholders’ equity$350,662 $351,002 
See accompanying Notes to Condensed Consolidated Financial Statements.
Apple Inc. | Q2 2022 Form 10-Q | 3

Apple Inc.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited)
(In millions, except per share amounts)

Three Months EndedSix Months Ended
March 26,
2022		March 27,
2021		March 26,
2022		March 27,
2021
Total shareholders’ equity, beginning balances$71,932 $66,224 $63,090 $65,339 
Common stock and additional paid-in capital:
Beginning balances58,424 51,744 57,365 50,779 
Common stock issued
593 561 593 561 
Common stock withheld related to net share settlement of equity awards
(149)(135)(1,412)(1,236)
Share-based compensation2,313 2,033 4,635 4,099 
Ending balances61,181 54,203 61,181 54,203 
Retained earnings:
Beginning balances14,435 14,301 5,562 14,966 
Net income25,010 23,630 59,640 52,385 
Dividends and dividend equivalents declared(3,633)(3,495)(7,298)(7,042)
Common stock withheld related to net share settlement of equity awards
(190)(174)(1,920)(2,047)
Common stock repurchased(22,910)(19,001)(43,272)(43,001)
Ending balances12,712 15,261 12,712 15,261 
Accumulated other comprehensive income/(loss):
Beginning balances(927)179 163 (406)
Other comprehensive income/(loss)(5,567)(465)(6,657)120 
Ending balances(6,494)(286)(6,494)(286)
Total shareholders’ equity, ending balances$67,399 $69,178 $67,399 $69,178 
Dividends and dividend equivalents declared per share or RSU$0.22 $0.205 $0.44 $0.41 
See accompanying Notes to Condensed Consolidated Financial Statements.
Apple Inc. | Q2 2022 Form 10-Q | 4

Apple Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In millions)

Six Months Ended
March 26,
2022		March 27,
2021
Cash, cash equivalents and restricted cash, beginning balances$35,929 $39,789 
Operating activities:
Net income59,640 52,385 
Adjustments to reconcile net income to cash generated by operating activities:
Depreciation and amortization5,434 5,463 
Share-based compensation expense4,517 4,001 
Deferred income tax expense/(benefit)1,088 (207)
Other(20)(474)
Changes in operating assets and liabilities:
Accounts receivable, net5,542 (2,347)
Inventories1,065 (1,226)
Vendor non-trade receivables643 6,792 
Other current and non-current assets(3,542)(4,333)
Accounts payable(1,750)(1,997)
Deferred revenue627 1,642 
Other current and non-current liabilities1,888 3,045 
Cash generated by operating activities75,132 62,744 
Investing activities:
Purchases of marketable securities(61,987)(74,424)
Proceeds from maturities of marketable securities18,000 39,605 
Proceeds from sales of marketable securities24,668 21,645 
Payments for acquisition of property, plant and equipment(5,317)(5,769)
Payments made in connection with business acquisitions, net(167)(9)
Other(568)— 
Cash used in investing activities(25,371)(18,952)
Financing activities:
Payments for taxes related to net share settlement of equity awards(3,218)(3,160)
Payments for dividends and dividend equivalents(7,327)(7,060)
Repurchases of common stock(43,109)(43,323)
Proceeds from issuance of term debt, net— 13,923 
Repayments of term debt(3,750)(4,500)
Proceeds from commercial paper, net999 22 
Other(105)523 
Cash used in financing activities(56,510)(43,575)
Increase/(Decrease) in cash, cash equivalents and restricted cash(6,749)217 
Cash, cash equivalents and restricted cash, ending balances$29,180 $40,006 
Supplemental cash flow disclosure:
Cash paid for income taxes, net$9,301 $10,276 
Cash paid for interest$1,406 $1,327 
See accompanying Notes to Condensed Consolidated Financial Statements.
Apple Inc. | Q2 2022 Form 10-Q | 5

Apple Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
Note 1 – Summary of Significant Accounting Policies
Basis of Presentation and Preparation
The condensed consolidated financial statements include the accounts of Apple Inc. and its wholly owned subsidiaries (collectively “Apple” or the “Company”). Intercompany accounts and transactions have been eliminated. In the opinion of the Company’s management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The preparation of these condensed consolidated financial statements and accompanying notes in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates. Certain prior period amounts in the condensed consolidated financial statements and accompanying notes have been reclassified to conform to the current period’s presentation. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s annual consolidated financial statements and accompanying notes included in its Annual Report on Form 10-K for the fiscal year ended September 25, 2021.
The Company’s fiscal year is the 52- or 53-week period that ends on the last Saturday of September. An additional week is included in the first fiscal quarter every five or six years to realign the Company’s fiscal quarters with calendar quarters. The Company’s fiscal years 2022 and 2021 span 52 weeks each. Unless otherwise stated, references to particular years, quarters, months and periods refer to the Company’s fiscal years ended in September and the associated quarters, months and periods of those fiscal years.
Earnings Per Share
The following table shows the computation of basic and diluted earnings per share for the three- and six-month periods ended March 26, 2022 and March 27, 2021 (net income in millions and shares in thousands):
Three Months EndedSix Months Ended
March 26,
2022		March 27,
2021		March 26,
2022		March 27,
2021
Numerator:
Net income$25,010 $23,630 $59,640 $52,385 
Denominator:
Weighted-average basic shares outstanding16,278,802 16,753,476 16,335,263 16,844,298 
Effect of dilutive securities124,514 175,681 126,041 177,125 
Weighted-average diluted shares16,403,316 16,929,157 16,461,304 17,021,423 
Basic earnings per share$1.54 $1.41 $3.65 $3.11 
Diluted earnings per share$1.52 $1.40 $3.62 $3.08 
Apple Inc. | Q2 2022 Form 10-Q | 6

Note 2 – Revenue
Net sales disaggregated by significant products and services for the three- and six-month periods ended March 26, 2022 and March 27, 2021 were as follows (in millions):
Three Months EndedSix Months Ended
March 26,
2022		March 27,
2021		March 26,
2022		March 27,
2021
iPhone® (1)
$50,570 $47,938 $122,198 $113,535 
Mac® (1)
10,435 9,102 21,287 17,777 
iPad® (1)
7,646 7,807 14,894 16,242 
Wearables, Home and Accessories (1)(2)
8,806 7,836 23,507 20,807 
Services (3)
19,821 16,901 39,337 32,662 
Total net sales (4)
$97,278 $89,584 $221,223 $201,023 
(1)Products net sales include amortization of the deferred value of unspecified software upgrade rights, which are bundled in the sales price of the respective product.
(2)Wearables, Home and Accessories net sales include sales of AirPods®, Apple TV®, Apple Watch®, Beats® products, HomePod mini®, iPod touch® and accessories.
(3)Services net sales include sales from the Company’s advertising, AppleCare®, cloud, digital content, payment and other services. Services net sales also include amortization of the deferred value of services bundled in the sales price of certain products.
(4)Includes $3.0 billion of revenue recognized in the three months ended March 26, 2022 that was included in deferred revenue as of December 25, 2021, $2.7 billion of revenue recognized in the three months ended March 27, 2021 that was included in deferred revenue as of December 26, 2020, $4.8 billion of revenue recognized in the six months ended March 26, 2022 that was included in deferred revenue as of September 25, 2021, and $4.1 billion of revenue recognized in the six months ended March 27, 2021 that was included in deferred revenue as of September 26, 2020.
The Company’s proportion of net sales by disaggregated revenue source was generally consistent for each reportable segment in Note 9, “Segment Information and Geographic Data” for the three- and six-month periods ended March 26, 2022 and March 27, 2021, except in Greater China, where iPhone revenue represented a moderately higher proportion of net sales.
As of March 26, 2022 and September 25, 2021, the Company had total deferred revenue of $12.5 billion and $11.9 billion, respectively. As of March 26, 2022, the Company expects 63% of total deferred revenue to be realized in less than a year, 27% within one-to-two years, 8% within two-to-three years and 2% in greater than three years.
Apple Inc. | Q2 2022 Form 10-Q | 7

Note 3 – Financial Instruments
Cash, Cash Equivalents and Marketable Securities
The following tables show the Company’s cash, cash equivalents and marketable securities by significant investment category as of March 26, 2022 and September 25, 2021 (in millions):
March 26, 2022
Adjusted
Cost		Unrealized
Gains		Unrealized
Losses		Fair
Value		Cash and
Cash
Equivalents		Current
Marketable
Securities
Non-Current
Marketable
Securities
Cash$14,298 $— $— $14,298 $14,298 $— $— 
Level 1 (1):
Money market funds7,653 — — 7,653 7,653 — — 
Mutual funds230 7 (9)228 — 228 — 
Subtotal7,883 7 (9)7,881 7,653 228 — 
Level 2 (2):
Equity securities1,527 — (1,132)395 — 395 — 
U.S. Treasury securities28,711 2 (1,037)27,676 2,306 3,554 21,816 
U.S. agency securities6,561 — (407)6,154 251 683 5,220 
Non-U.S. government securities18,868 44 (551)18,361 25 4,526 13,810 
Certificates of deposit and time deposits
2,872 — — 2,872 2,221 601 50 
Commercial paper2,913 — — 2,913 1,310 1,603 — 
Corporate debt securities93,057 94 (4,266)88,885 34 11,309 77,542 
Municipal securities990 1 (22)969 — 162 807 
Mortgage- and asset-backed securities
23,613 3 (1,290)22,326 — 352 21,974 
Subtotal179,112 144 (8,705)170,551 6,147 23,185 141,219 
Total (3)
$201,293 $151 $(8,714)$192,730 $28,098 $23,413 $141,219 
September 25, 2021
Adjusted
Cost		Unrealized
Gains		Unrealized
Losses		Fair
Value		Cash and
Cash
Equivalents		Current
Marketable
Securities		Non-Current
Marketable
Securities
Cash$17,305 $— $— $17,305 $17,305 $— $— 
Level 1 (1):
Money market funds9,608 — — 9,608 9,608 — — 
Mutual funds175 11 (1)185 — 185 — 
Subtotal9,783 11 (1)9,793 9,608 185 — 
Level 2 (2):
Equity securities1,527 — (564)963 — 963 — 
U.S. Treasury securities22,878 102 (77)22,903 3,596 6,625 12,682 
U.S. agency securities8,949 2 (64)8,887 1,775 1,930 5,182 
Non-U.S. government securities20,201 211 (101)20,311 390 3,091 16,830 
Certificates of deposit and time deposits
1,300 — — 1,300 490 810 — 
Commercial paper2,639 — — 2,639 1,776 863 — 
Corporate debt securities83,883 1,242 (267)84,858 — 12,327 72,531 
Municipal securities967 14 — 981 — 130 851 
Mortgage- and asset-backed securities
20,529 171 (124)20,576 — 775 19,801 
Subtotal162,873 1,742 (1,197)163,418 8,027 27,514 127,877 
Total (3)
$189,961 $1,753 $(1,198)$190,516 $34,940 $27,699 $127,877 
(1)Level 1 fair value estimates are based on quoted prices in active markets for identical assets or liabilities.
(2)Level 2 fair value estimates are based on observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
(3)As of March 26, 2022 and September 25, 2021, total marketable securities included $15.4 billion and $17.9 billion, respectively, that were restricted from general use, related to the European Commission decision finding that Ireland granted state aid to the Company, and other agreements.
Apple Inc. | Q2 2022 Form 10-Q | 8

The following table shows the fair value of the Company’s non-current marketable debt securities, by contractual maturity, as of March 26, 2022 (in millions):
Due after 1 year through 5 years$97,603 
Due after 5 years through 10 years22,899 
Due after 10 years20,717 
Total fair value$141,219 
Derivative Instruments and Hedging
The Company may use derivative instruments to partially offset its business exposure to foreign exchange and interest rate risk. However, the Company may choose not to hedge certain exposures for a variety of reasons, including accounting considerations or the prohibitive economic cost of hedging particular exposures. There can be no assurance the hedges will offset more than a portion of the financial impact resulting from movements in foreign exchange or interest rates.
Foreign Exchange Risk
To protect gross margins from fluctuations in foreign currency exchange rates, the Company may enter into forward contracts, option contracts or other instruments, and may designate these instruments as cash flow hedges. The Company generally hedges portions of its forecasted foreign currency exposure associated with revenue and inventory purchases, typically for up to 12 months.
To protect the Company’s foreign currency–denominated term debt or marketable securities from fluctuations in foreign currency exchange rates, the Company may enter into forward contracts, cross-currency swaps or other instruments. The Company designates these instruments as either cash flow or fair value hedges. As of March 26, 2022, the Company’s hedged term debt– and marketable securities–related foreign currency transactions are expected to be recognized within 20 years.
The Company may also enter into derivative instruments that are not designated as accounting hedges to protect gross margins from certain fluctuations in foreign currency exchange rates, as well as to offset a portion of the foreign currency exchange gains and losses generated by the remeasurement of certain assets and liabilities denominated in non-functional currencies.
Interest Rate Risk
To protect the Company’s term debt or marketable securities from fluctuations in interest rates, the Company may enter into interest rate swaps, options or other instruments. The Company designates these instruments as either cash flow or fair value hedges.
The notional amounts of the Company’s outstanding derivative instruments as of March 26, 2022 and September 25, 2021 were as follows (in millions):
March 26,
2022		September 25,
2021
Derivative instruments designated as accounting hedges:
Foreign exchange contracts$65,140 $76,475 
Interest rate contracts$20,775 $16,875 
Derivative instruments not designated as accounting hedges:
Foreign exchange contracts$110,758 $126,918 
The gross fair values of the Company’s derivative assets and liabilities were not material as of March 26, 2022 and September 25, 2021.
The gains and losses recognized in other comprehensive income/(loss) and amounts reclassified from accumulated other comprehensive income/(loss) to net income for the Company’s derivative instruments designated as cash flow hedges were not material in the three- and six-month periods ended March 26, 2022 and March 27, 2021.
Apple Inc. | Q2 2022 Form 10-Q | 9

The carrying amounts of the Company’s hedged items in fair value hedges as of March 26, 2022 and September 25, 2021 were as follows (in millions):
March 26,
2022		September 25,
2021
Hedged assets/(liabilities):
Current and non-current marketable securities$14,943 $15,954 
Current and non-current term debt$(19,766)$(17,857)
The gains and losses on the Company’s derivative instruments designated as fair value hedges and the related hedged item adjustments were not material in the three- and six-month periods ended March 26, 2022 and March 27, 2021.
Accounts Receivable
Trade Receivables
The Company has considerable trade receivables outstanding with its third-party cellular network carriers, wholesalers, retailers, resellers, small and mid-sized businesses and education, enterprise and government customers. The Company generally does not require collateral from its customers; however, the Company will require collateral or third-party credit support in certain instances to limit credit risk. In addition, when possible, the Company attempts to limit credit risk on trade receivables with credit insurance for certain customers or by requiring third-party financing, loans or leases to support credit exposure. These credit-financing arrangements are directly between the third-party financing company and the end customer. As such, the Company generally does not assume any recourse or credit risk sharing related to any of these arrangements.
The Company’s cellular network carriers accounted for 36% and 42% of total trade receivables as of March 26, 2022 and September 25, 2021, respectively.
Vendor Non-Trade Receivables
The Company has non-trade receivables from certain of its manufacturing vendors resulting from the sale of components to these vendors who manufacture subassemblies or assemble final products for the Company. The Company purchases these components directly from suppliers. As of March 26, 2022, the Company had two vendors that individually represented 10% or more of total vendor non-trade receivables, which accounted for 52% and 12%. As of September 25, 2021, the Company had three vendors that individually represented 10% or more of total vendor non-trade receivables, which accounted for 52%, 11% and 11%.
Note 4 – Condensed Consolidated Financial Statement Details
The following tables show the Company’s condensed consolidated financial statement details as of March 26, 2022 and September 25, 2021 (in millions):
Property, Plant and Equipment, Net
March 26,
2022		September 25,
2021
Gross property, plant and equipment$109,324 $109,723 
Accumulated depreciation and amortization(70,020)(70,283)
Total property, plant and equipment, net$39,304 $39,440 
Other Non-Current Liabilities
March 26,
2022		September 25,
2021
Long-term taxes payable$20,711 $24,689 
Other non-current liabilities31,721 28,636 
Total other non-current liabilities$52,432 $53,325 
Apple Inc. | Q2 2022 Form 10-Q | 10

Other Income/(Expense), Net
The following table shows the detail of other income/(expense), net for the three- and six-month periods ended March 26, 2022 and March 27, 2021 (in millions):
Three Months EndedSix Months Ended
March 26,
2022		March 27,
2021		March 26,
2022		March 27,
2021
Interest and dividend income$700 $718 $1,350 $1,465 
Interest expense(691)(670)(1,385)(1,308)
Other income/(expense), net151 460 (52)396 
Total other income/(expense), net$160 $508 $(87)$553 
Note 5 – Debt
Commercial Paper
The Company issues unsecured short-term promissory notes (“Commercial Paper”) pursuant to a commercial paper program. The Company uses net proceeds from the commercial paper program for general corporate purposes, including dividends and share repurchases. As of March 26, 2022 and September 25, 2021, the Company had $7.0 billion and $6.0 billion of Commercial Paper outstanding, respectively. The following table provides a summary of cash flows associated with the issuance and maturities of Commercial Paper for the six months ended March 26, 2022 and March 27, 2021 (in millions):
Six Months Ended
March 26,
2022		March 27,
2021
Maturities 90 days or less:
Proceeds from commercial paper, net$4,952 $2,008 
Maturities greater than 90 days:
Proceeds from commercial paper1,191 1,368 
Repayments of commercial paper(5,144)(3,354)
Repayments of commercial paper, net(3,953)(1,986)
Total proceeds from commercial paper, net$999 $22 
Term Debt
As of March 26, 2022 and September 25, 2021, the Company had outstanding floating- and fixed-rate notes with varying maturities for an aggregate carrying amount of $113.0 billion and $118.7 billion, respectively (collectively the “Notes”). As of March 26, 2022 and September 25, 2021, the fair value of the Company’s Notes, based on Level 2 inputs, was $110.5 billion and $125.3 billion, respectively.
Note 6 – Shareholders’ Equity
Share Repurchase Program
During the six months ended March 26, 2022, the Company repurchased 266 million shares of its common stock for $43.3 billion under a share repurchase program authorized by the Board of Directors (the “Program”), including 35 million shares delivered under accelerated share repurchase agreements totaling $6.0 billion that were entered into in November 2021. The Program does not obligate the Company to acquire a minimum amount of shares. Under the Program, shares may be repurchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended.
Apple Inc. | Q2 2022 Form 10-Q | 11

Note 7 – Benefit Plans
Restricted Stock Units
A summary of the Company’s restricted stock unit (“RSU”) activity and related information for the six months ended March 26, 2022 is as follows:
Number of
RSUs
(in thousands)
Weighted-Average
Grant Date Fair
Value Per RSU
Aggregate
Fair Value
(in millions)
Balance as of September 25, 2021240,427 $75.16 
RSUs granted76,920 $149.72 
RSUs vested(62,476)$62.86 
RSUs canceled(8,407)$95.86 
Balance as of March 26, 2022246,464 $100.84 $43,062 
The fair value as of the respective vesting dates of RSUs was $1.0 billion and $9.5 billion for the three- and six-month periods ended March 26, 2022, respectively, and was $867 million and $9.4 billion for the three- and six-month periods ended March 27, 2021, respectively.
Share-Based Compensation
The following table shows share-based compensation expense and the related income tax benefit included in the Condensed Consolidated Statements of Operations for the three- and six-month periods ended March 26, 2022 and March 27, 2021 (in millions):
Three Months EndedSix Months Ended
March 26,
2022		March 27,
2021		March 26,
2022		March 27,
2021
Share-based compensation expense$2,252 $1,981 $4,517 $4,001 
Income tax benefit related to share-based compensation expense
$(649)$(575)$(2,185)$(2,199)
As of March 26, 2022, the total unrecognized compensation cost related to outstanding RSUs and stock options was $19.3 billion, which the Company expects to recognize over a weighted-average period of 2.8 years.
Note 8 – Commitments and Contingencies
Accrued Warranty
The following table shows changes in the Company’s accrued warranties and related costs for the three- and six-month periods ended March 26, 2022 and March 27, 2021 (in millions):
Three Months EndedSix Months Ended
March 26,
2022		March 27,
2021		March 26,
2022		March 27,
2021
Beginning accrued warranty and related costs$3,530 $4,124 $3,364 $3,354 
Cost of warranty claims(581)(649)(1,253)(1,372)
Accruals for product warranty257 309 1,095 1,802 
Ending accrued warranty and related costs$3,206 $3,784 $3,206 $3,784 
Contingencies
The Company is subject to various legal proceedings and claims that have arisen in the ordinary course of business and that have not been fully resolved. The outcome of litigation is inherently uncertain. In the opinion of management, there was not at least a reasonable possibility the Company may have incurred a material loss, or a material loss greater than a recorded accrual, concerning loss contingencies for asserted legal and other claims.
Apple Inc. | Q2 2022 Form 10-Q | 12

Note 9 – Segment Information and Geographic Data
The following table shows information by reportable segment for the three- and six-month periods ended March 26, 2022 and March 27, 2021 (in millions):
Three Months EndedSix Months Ended
March 26,
2022		March 27,
2021		March 26,
2022		March 27,
2021
Americas:
Net sales$40,882 $34,306 $92,378 $80,616 
Operating income$15,279 $12,050 $34,864 $27,835 
Europe:
Net sales