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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 April 1, 2023
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
g66145g66i43.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
1.375% 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 filerAccelerated filer
Non-accelerated filerSmaller 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  
15,728,702,000 shares of common stock were issued and outstanding as of April 21, 2023.



Apple Inc.

Form 10-Q
For the Fiscal Quarter Ended April 1, 2023
TABLE OF CONTENTS

Page



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
April 1,
2023
March 26,
2022
April 1,
2023
March 26,
2022
Net sales:
   Products$73,929 $77,457 $170,317 $181,886 
   Services20,907 19,821 41,673 39,337 
Total net sales94,836 97,278 211,990 221,223 
Cost of sales:
   Products46,795 49,290 107,560 113,599 
   Services6,065 5,429 12,122 10,822 
Total cost of sales52,860 54,719 119,682 124,421 
Gross margin41,976 42,559 92,308 96,802 
Operating expenses:
Research and development7,457 6,387 15,166 12,693 
Selling, general and administrative6,201 6,193 12,808 12,642 
Total operating expenses13,658 12,580 27,974 25,335 
Operating income28,318 29,979 64,334 71,467 
Other income/(expense), net64 160 (329)(87)
Income before provision for income taxes28,382 30,139 64,005 71,380 
Provision for income taxes4,222 5,129 9,847 11,740 
Net income$24,160 $25,010 $54,158 $59,640 
Earnings per share:
Basic$1.53 $1.54 $3.42 $3.65 
Diluted$1.52 $1.52 $3.41 $3.62 
Shares used in computing earnings per share:
Basic15,787,154 16,278,802 15,839,939 16,335,263 
Diluted15,847,050 16,403,316 15,901,384 16,461,304 
See accompanying Notes to Condensed Consolidated Financial Statements.
Apple Inc. | Q2 2023 Form 10-Q | 1


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

Three Months EndedSix Months Ended
April 1,
2023
March 26,
2022
April 1,
2023
March 26,
2022
Net income
$24,160 $25,010 $54,158 $59,640 
Other comprehensive income/(loss):
Change in foreign currency translation, net of tax
(95)(21)(109)(381)
Change in unrealized gains/losses on derivative instruments, net of tax:
Change in fair value of derivative instruments(13)334 (1,001)696 
Adjustment for net (gains)/losses realized and included in net income(191)(301)(1,957)(208)
Total change in unrealized gains/losses on derivative instruments
(204)33 (2,958)488 
Change in unrealized gains/losses on marketable debt securities, net of tax:
Change in fair value of marketable debt securities
1,403 (5,633)2,303 (6,809)
Adjustment for net (gains)/losses realized and included in net income
62 54 127 45 
Total change in unrealized gains/losses on marketable debt securities
1,465 (5,579)2,430 (6,764)
Total other comprehensive income/(loss)1,166 (5,567)(637)(6,657)
Total comprehensive income$25,326 $19,443 $53,521 $52,983 
See accompanying Notes to Condensed Consolidated Financial Statements.
Apple Inc. | Q2 2023 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)

April 1,
2023
September 24,
2022
ASSETS:
Current assets:
Cash and cash equivalents$24,687 $23,646 
Marketable securities31,185 24,658 
Accounts receivable, net17,936 28,184 
Inventories7,482 4,946 
Vendor non-trade receivables17,963 32,748 
Other current assets13,660 21,223 
Total current assets112,913 135,405 
Non-current assets:
Marketable securities110,461 120,805 
Property, plant and equipment, net43,398 42,117 
Other non-current assets65,388 54,428 
Total non-current assets
219,247 217,350 
Total assets
$332,160 $352,755 
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
Accounts payable$42,945 $64,115 
Other current liabilities56,425 60,845 
Deferred revenue8,131 7,912 
Commercial paper1,996 9,982 
Term debt10,578 11,128 
Total current liabilities120,075 153,982 
Non-current liabilities:
Term debt
97,041 98,959 
Other non-current liabilities
52,886 49,142 
Total non-current liabilities
149,927 148,101 
Total liabilities
270,002 302,083 
Commitments and contingencies
Shareholders’ equity:
Common stock and additional paid-in capital, $0.00001 par value: 50,400,000 shares authorized; 15,723,406 and 15,943,425 shares issued and outstanding, respectively
69,568 64,849 
Retained earnings/(Accumulated deficit)4,336 (3,068)
Accumulated other comprehensive income/(loss)(11,746)(11,109)
Total shareholders’ equity62,158 50,672 
Total liabilities and shareholders’ equity$332,160 $352,755 
See accompanying Notes to Condensed Consolidated Financial Statements.
Apple Inc. | Q2 2023 Form 10-Q | 3


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

Three Months EndedSix Months Ended
April 1,
2023
March 26,
2022
April 1,
2023
March 26,
2022
Total shareholders’ equity, beginning balances$56,727 $71,932 $50,672 $63,090 
Common stock and additional paid-in capital:
Beginning balances66,399 58,424 64,849 57,365 
Common stock issued
690 593 690 593 
Common stock withheld related to net share settlement of equity awards
(281)(149)(1,715)(1,412)
Share-based compensation2,760 2,313 5,744 4,635 
Ending balances69,568 61,181 69,568 61,181 
Retained earnings/(Accumulated deficit):
Beginning balances3,240 14,435 (3,068)5,562 
Net income24,160 25,010 54,158 59,640 
Dividends and dividend equivalents declared(3,684)(3,633)(7,396)(7,298)
Common stock withheld related to net share settlement of equity awards
(152)(190)(1,130)(1,920)
Common stock repurchased(19,228)(22,910)(38,228)(43,272)
Ending balances4,336 12,712 4,336 12,712 
Accumulated other comprehensive income/(loss):
Beginning balances(12,912)(927)(11,109)163 
Other comprehensive income/(loss)1,166 (5,567)(637)(6,657)
Ending balances(11,746)(6,494)(11,746)(6,494)
Total shareholders’ equity, ending balances$62,158 $67,399 $62,158 $67,399 
Dividends and dividend equivalents declared per share or RSU$0.23 $0.22 $0.46 $0.44 
See accompanying Notes to Condensed Consolidated Financial Statements.
Apple Inc. | Q2 2023 Form 10-Q | 4


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

Six Months Ended
April 1,
2023
March 26,
2022
Cash, cash equivalents and restricted cash, beginning balances$24,977 $35,929 
Operating activities:
Net income54,158 59,640 
Adjustments to reconcile net income to cash generated by operating activities:
Depreciation and amortization5,814 5,434 
Share-based compensation expense5,591 4,517 
Other(1,732)1,068 
Changes in operating assets and liabilities:
Accounts receivable, net9,596 5,542 
Inventories(2,548)1,065 
Vendor non-trade receivables14,785 643 
Other current and non-current assets(4,092)(3,542)
Accounts payable(20,764)(1,750)
Other current and non-current liabilities1,757 2,515 
Cash generated by operating activities62,565 75,132 
Investing activities:
Purchases of marketable securities(11,197)(61,987)
Proceeds from maturities of marketable securities17,124 18,000 
Proceeds from sales of marketable securities1,897 24,668 
Payments for acquisition of property, plant and equipment(6,703)(5,317)
Other(247)(735)
Cash generated by/(used in) investing activities874 (25,371)
Financing activities:
Payments for taxes related to net share settlement of equity awards(2,734)(3,218)
Payments for dividends and dividend equivalents(7,418)(7,327)
Repurchases of common stock(39,069)(43,109)
Repayments of term debt(3,651)(3,750)
Proceeds from/(Repayments of) commercial paper, net(7,960)999 
Other(455)(105)
Cash used in financing activities(61,287)(56,510)
Increase/(Decrease) in cash, cash equivalents and restricted cash2,152 (6,749)
Cash, cash equivalents and restricted cash, ending balances$27,129 $29,180 
Supplemental cash flow disclosure:
Cash paid for income taxes, net$4,894 $9,301 
Cash paid for interest$1,873 $1,406 
See accompanying Notes to Condensed Consolidated Financial Statements.
Apple Inc. | Q2 2023 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 24, 2022.
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, which occurred in the first fiscal quarter of 2023. The Company’s fiscal years 2023 and 2022 span 53 and 52 weeks, respectively. 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 April 1, 2023 and March 26, 2022 (net income in millions and shares in thousands):
Three Months EndedSix Months Ended
April 1,
2023
March 26,
2022
April 1,
2023
March 26,
2022
Numerator:
Net income$24,160 $25,010 $54,158 $59,640 
Denominator:
Weighted-average basic shares outstanding15,787,154 16,278,802 15,839,939 16,335,263 
Effect of dilutive securities59,896 124,514 61,445 126,041 
Weighted-average diluted shares15,847,050 16,403,316 15,901,384 16,461,304 
Basic earnings per share$1.53 $1.54 $3.42 $3.65 
Diluted earnings per share$1.52 $1.52 $3.41 $3.62 
Approximately 48 million restricted stock units (“RSUs”) were excluded from the computation of diluted earnings per share for the six months ended April 1, 2023 because their effect would have been antidilutive.
Apple Inc. | Q2 2023 Form 10-Q | 6


Note 2 – Revenue
Net sales disaggregated by significant products and services for the three- and six-month periods ended April 1, 2023 and March 26, 2022 were as follows (in millions):
Three Months EndedSix Months Ended
April 1,
2023
March 26,
2022
April 1,
2023
March 26,
2022
iPhone®
$51,334 $50,570 $117,109 $122,198 
Mac®
7,168 10,435 14,903 21,287 
iPad®
6,670 7,646 16,066 14,894 
Wearables, Home and Accessories8,757 8,806 22,239 23,507 
Services20,907 19,821 41,673 39,337 
Total net sales$94,836 $97,278 $211,990 $221,223 
Total net sales include $3.5 billion of revenue recognized in the three months ended April 1, 2023 that was included in deferred revenue as of December 31, 2022, $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, $5.5 billion of revenue recognized in the six months ended April 1, 2023 that was included in deferred revenue as of September 24, 2022, and $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.
The Company’s proportion of net sales by disaggregated revenue source was generally consistent for each reportable segment in Note 10, “Segment Information and Geographic Data” for the three- and six-month periods ended April 1, 2023 and March 26, 2022, except in Greater China, where iPhone revenue represented a moderately higher proportion of net sales.
As of April 1, 2023 and September 24, 2022, the Company had total deferred revenue of $12.5 billion and $12.4 billion, respectively. As of April 1, 2023, the Company expects 65% of total deferred revenue to be realized in less than a year, 26% within one-to-two years, 7% within two-to-three years and 2% in greater than three years.
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 April 1, 2023 and September 24, 2022 (in millions):
April 1, 2023
Adjusted
Cost
Unrealized
Gains
Unrealized
Losses
Fair
Value
Cash and
Cash
Equivalents
Current
Marketable
Securities
Non-Current
Marketable
Securities
Cash$20,050 $— $— $20,050 $20,050 $ $ 
Level 1 (1):
Money market funds1,656   1,656 1,656   
Mutual funds345 5 (26)324  324  
Subtotal2,001 5 (26)1,980 1,656 324  
Level 2 (2):
U.S. Treasury securities22,754 1 (1,262)21,493 9 8,002 13,482 
U.S. agency securities5,743  (538)5,205  199 5,006 
Non-U.S. government securities17,380 20 (961)16,439  10,222 6,217 
Certificates of deposit and time deposits
2,999   2,999 2,881 118  
Commercial paper271   271  271  
Corporate debt securities82,802 32 (6,049)76,785 91 11,676 65,018 
Municipal securities790  (20)770  257 513 
Mortgage- and asset-backed securities
22,438 9 (2,106)20,341  116 20,225 
Subtotal155,177 62 (10,936)144,303 2,981 30,861 110,461 
Total (3)
$177,228 $67 $(10,962)$166,333 $24,687 $31,185 $110,461 
Apple Inc. | Q2 2023 Form 10-Q | 7


September 24, 2022
Adjusted
Cost
Unrealized
Gains
Unrealized
Losses
Fair
Value
Cash and
Cash
Equivalents
Current
Marketable
Securities
Non-Current
Marketable
Securities
Cash$18,546 $— $— $18,546 $18,546 $ $ 
Level 1 (1):
Money market funds2,929   2,929 2,929   
Mutual funds274  (47)227  227  
Subtotal3,203  (47)3,156 2,929 227  
Level 2 (2):
U.S. Treasury securities25,134  (1,725)23,409 338 5,091 17,980 
U.S. agency securities5,823  (655)5,168  240 4,928 
Non-U.S. government securities16,948 2 (1,201)15,749  8,806 6,943 
Certificates of deposit and time deposits
2,067   2,067 1,805 262  
Commercial paper718   718 28 690  
Corporate debt securities87,148 9 (7,707)79,450  9,023 70,427 
Municipal securities921  (35)886  266 620 
Mortgage- and asset-backed securities
22,553  (2,593)19,960  53 19,907 
Subtotal161,312 11 (13,916)147,407 2,171 24,431 120,805 
Total (3)
$183,061 $11 $(13,963)$169,109 $23,646 $24,658 $120,805 
(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 April 1, 2023 and September 24, 2022, total marketable securities included $13.1 billion and $12.7 billion, respectively, that were restricted from general use, related to the State Aid Decision (refer to Note 5, “Income Taxes”) and other agreements.
The following table shows the fair value of the Company’s non-current marketable debt securities, by contractual maturity, as of April 1, 2023 (in millions):
Due after 1 year through 5 years$81,352 
Due after 5 years through 10 years11,928 
Due after 10 years17,181 
Total fair value$110,461 
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 April 1, 2023, the maximum length of time over which the Company is hedging its exposure to the variability in future cash flows for term debt–related foreign currency transactions is 19 years.
Apple Inc. | Q2 2023 Form 10-Q | 8


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 April 1, 2023 and September 24, 2022 were as follows (in millions):
April 1,
2023
September 24,
2022
Derivative instruments designated as accounting hedges:
Foreign exchange contracts$51,119 $102,670 
Interest rate contracts$19,375 $20,125 
Derivative instruments not designated as accounting hedges:
Foreign exchange contracts$111,696 $185,381 
The gross fair values of the Company’s derivative assets and liabilities as of September 24, 2022 were as follows (in millions):
September 24, 2022
Fair Value of
Derivatives Designated
as Accounting Hedges
Fair Value of
Derivatives Not Designated
as Accounting Hedges
Total
Fair Value
Derivative assets (1):
Foreign exchange contracts$4,317 $2,819 $7,136 
Derivative liabilities (2):
Foreign exchange contracts$2,205 $2,547 $4,752 
Interest rate contracts$1,367 $ $1,367 
(1)Derivative assets are measured using Level 2 fair value inputs and are included in other current assets and other non-current assets in the Condensed Consolidated Balance Sheet.
(2)Derivative liabilities are measured using Level 2 fair value inputs and are included in other current liabilities and other non-current liabilities in the Condensed Consolidated Balance Sheet.
The derivative assets above represent the Company’s gross credit exposure if all counterparties failed to perform. To mitigate credit risk, the Company generally enters into collateral security arrangements that provide for collateral to be received or posted when the net fair values of certain derivatives fluctuate from contractually established thresholds. To further limit credit risk, the Company generally enters into master netting arrangements with the respective counterparties to the Company’s derivative contracts, under which the Company is allowed to settle transactions with a single net amount payable by one party to the other. As of September 24, 2022, the potential effects of these rights of set-off associated with the Company’s derivative contracts, including the effects of collateral, would be a reduction to both derivative assets and derivative liabilities of $7.8 billion, resulting in a net derivative asset of $412 million.
The carrying amounts of the Company’s hedged items in fair value hedges as of April 1, 2023 and September 24, 2022 were as follows (in millions):
April 1,
2023
September 24,
2022
Hedged assets/(liabilities):
Current and non-current marketable securities$14,651 $13,378 
Current and non-current term debt$(18,249)$(18,739)
Apple Inc. | Q2 2023 Form 10-Q | 9


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.
As of both April 1, 2023 and September 24, 2022, the Company had one customer that represented 10% or more of total trade receivables, which accounted for 10%. The Company’s cellular network carriers accounted for 32% and 44% of total trade receivables as of April 1, 2023 and September 24, 2022, 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 April 1, 2023, the Company had three vendors that individually represented 10% or more of total vendor non-trade receivables, which accounted for 43%, 19% and 13%. As of September 24, 2022, the Company had two vendors that individually represented 10% or more of total vendor non-trade receivables, which accounted for 54% and 13%.
Note 4 – Condensed Consolidated Financial Statement Details
The following tables show the Company’s condensed consolidated financial statement details as of April 1, 2023 and September 24, 2022 (in millions):
Inventories
April 1,
2023
September 24,
2022
Components$3,379 $1,637 
Finished goods4,103 3,309 
Total inventories$7,482 $4,946 
Property, Plant and Equipment, Net
April 1,
2023
September 24,
2022
Gross property, plant and equipment$113,066 $114,457 
Accumulated depreciation and amortization(69,668)(72,340)
Total property, plant and equipment, net$43,398 $42,117 
Other Income/(Expense), Net
The following table shows the detail of other income/(expense), net for the three- and six-month periods ended April 1, 2023 and March 26, 2022 (in millions):
Three Months EndedSix Months Ended
April 1,
2023
March 26,
2022
April 1,
2023
March 26,
2022
Interest and dividend income$918 $700 $1,786 $1,350 
Interest expense(930)(691)(1,933)(1,385)
Other income/(expense), net76 151 (182)(52)
Total other income/(expense), net$64 $160 $(329)$(87)
Apple Inc. | Q2 2023 Form 10-Q | 10


Note 5 – Income Taxes
European Commission State Aid Decision
On August 30, 2016, the European Commission announced its decision that Ireland granted state aid to the Company by providing tax opinions in 1991 and 2007 concerning the tax allocation of profits of the Irish branches of two subsidiaries of the Company (the “State Aid Decision”). The State Aid Decision ordered Ireland to calculate and recover additional taxes from the Company for the period June 2003 through December 2014. Irish legislative changes, effective as of January 2015, eliminated the application of the tax opinions from that date forward. The Company and Ireland appealed the State Aid Decision to the General Court of the Court of Justice of the European Union (the “General Court”). On July 15, 2020, the General Court annulled the State Aid Decision. On September 25, 2020, the European Commission appealed the General Court’s decision to the European Court of Justice and a hearing has been scheduled for May 23, 2023. The Company believes it would be eligible to claim a U.S. foreign tax credit for a portion of any incremental Irish corporate income taxes potentially due related to the State Aid Decision.
Note 6 – 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 April 1, 2023 and September 24, 2022, the Company had $2.0 billion and $10.0 billion of Commercial Paper outstanding, respectively. The following table provides a summary of cash flows associated with the issuance and maturities of Commercial Paper for the six months ended April 1, 2023 and March 26, 2022 (in millions):
Six Months Ended
April 1,
2023
March 26,
2022
Maturities 90 days or less:
Proceeds from/(Repayments of) commercial paper, net$(5,315)$4,952 
Maturities greater than 90 days:
Proceeds from commercial paper 1,191 
Repayments of commercial paper(2,645)(5,144)
Repayments of commercial paper, net(2,645)(3,953)
Total proceeds from/(repayments of) commercial paper, net$(7,960)$999 
Term Debt
As of April 1, 2023 and September 24, 2022, the Company had outstanding fixed-rate notes with varying maturities for an aggregate carrying amount of $107.6 billion and $110.1 billion, respectively (collectively the “Notes”). As of April 1, 2023 and September 24, 2022, the fair value of the Company’s Notes, based on Level 2 inputs, was $98.4 billion and $98.8 billion, respectively.
Note 7 – Shareholders’ Equity
Share Repurchase Program
During the six months ended April 1, 2023, the Company repurchased 262 million shares of its common stock under an authorized share repurchase program for $38.1 billion, excluding excise tax due under the Inflation Reduction Act of 2022. The program does not obligate the Company to acquire a minimum amount of shares. Under the program, shares may be repurchased in privately negotiated or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended.
Apple Inc. | Q2 2023 Form 10-Q | 11


Note 8 – Benefit Plans
Restricted Stock Units
A summary of the Company’s RSU activity and related information for the six months ended April 1, 2023 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 24, 2022201,501 $109.48 
RSUs granted84,902 $149.73 
RSUs vested(54,795)$86.72 
RSUs canceled(4,671)$122.79 
Balance as of April 1, 2023226,937 $129.76 $37,422 
The fair value as of the respective vesting dates of RSUs was $1.1 billion and $8.0 billion for the three- and six-month periods ended April 1, 2023, respectively, and was $1.0 billion and $9.5 billion for the three- and six-month periods ended March 26, 2022, 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 April 1, 2023 and March 26, 2022 (in millions):
Three Months EndedSix Months Ended
April 1,
2023
March 26,
2022
April 1,
2023
March 26,
2022
Share-based compensation expense$2,686 $2,252 $5,591 $4,517 
Income tax benefit related to share-based compensation expense$(620)$(649)$(1,798)$(2,185)
As of April 1, 2023, the total unrecognized compensation cost related to outstanding RSUs and stock options was $23.2 billion, which the Company expects to recognize over a weighted-average period of 2.8 years.
Note 9 – Commitments and Contingencies
Unconditional Purchase Obligations
The Company has entered into certain off–balance sheet commitments that require the future purchase of goods or services (“unconditional purchase obligations”). The Company’s unconditional purchase obligations primarily consist of supplier arrangements, licensed content and distribution rights. Future payments under noncancelable unconditional purchase obligations with a remaining term in excess of one year as of April 1, 2023, are as follows (in millions):
2023 (remaining six months)$2,263 
20242,716 
20252,028 
20262,602 
2027571 
Thereafter5,897 
Total$16,077 
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 2023 Form 10-Q | 12


Note 10 – Segment Information and Geographic Data
The following table shows information by reportable segment for the three- and six-month periods ended April 1, 2023 and March 26, 2022 (in millions):
Three Months EndedSix Months Ended
April 1,
2023
March 26,
2022
April 1,
2023
March 26,
2022
Americas:
Net sales$37,784 $40,882 $87,062 $92,378 
Operating income$13,927 $15,279 $31,791 $34,864 
Europe:
Net sales$23,945 $23,287 $51,626 $