8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

January 26, 2016

Date of Report (Date of earliest event reported)

Apple Inc.

(Exact name of Registrant as specified in its charter)

California	001-36743	94-2404110
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS. Employer Identification No.)

1 Infinite Loop

Cupertino, California 95014

(Address of principal executive offices) (Zip Code)

(408) 996-1010

(Registrant’s telephone number, including area code)

Not applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

¨ 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.

On January 26, 2016, Apple Inc. (“Apple”) issued a press release regarding Apple’s financial results for its first fiscal quarter ended December 26, 2015, a related data sheet and supplemental materials. A copy of Apple’s press release is attached hereto as Exhibit 99.1, a copy of the related data sheet is attached hereto as Exhibit 99.2 and a copy of the supplemental materials is attached hereto as Exhibit 99.3.

The information contained in this Current Report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Exhibit Description
99.1	Press release issued by Apple Inc. on January 26, 2016.
99.2	Data sheet issued by Apple Inc. on January 26, 2016.
99.3	Supplement materials issued by Apple Inc. on January 26, 2016.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: January 26, 2016	Apple Inc.
	By:	/s/ Luca Maestri
		Luca Maestri
		Senior Vice President,
		Chief Financial Officer

Exhibit Index

Exhibit Number	Exhibit Description
99.1	Press release issued by Apple Inc. on January 26, 2016.
99.2	Data sheet issued by Apple Inc. on January 26, 2016.
99.3	Supplemental materials issued by Apple Inc. on January 26, 2016.

EX-99.1

Exhibit 99.1

Apple Reports Record First Quarter Results

iPhone, Apple Watch, Services & Apple TV Drive All-time Record Revenue

Results Produce Record Quarterly Profit of $18.4 Billion

CUPERTINO, California — January 26, 2016 — Apple^® today announced financial results for its fiscal 2016 first quarter ended December 26, 2015. The Company posted record quarterly revenue of $75.9 billion and record quarterly net income of $18.4 billion, or $3.28 per diluted share. These results compare to revenue of $74.6 billion and net income of $18 billion, or $3.06 per diluted share, in the year-ago quarter. Gross margin was 40.1 percent compared to 39.9 percent in the year-ago quarter. International sales accounted for 66 percent of the quarter’s revenue.

“Our team delivered Apple’s biggest quarter ever, thanks to the world’s most innovative products and all-time record sales of iPhone, Apple Watch and Apple TV,” said Tim Cook, Apple’s CEO. “The growth of our Services business accelerated during the quarter to produce record results, and our installed base recently crossed a major milestone of one billion active devices.”

“Our record sales and strong margins drove all-time records for net income and EPS in spite of a very difficult macroeconomic environment,” said Luca Maestri, Apple’s CFO. “We generated operating cash flow of $27.5 billion during the quarter, and returned over $9 billion to investors through share repurchases and dividends. We have now completed $153 billion of our $200 billion capital return program.”

Apple is providing the following guidance for its fiscal 2016 second quarter:

• revenue between $50 billion and $53 billion

• gross margin between 39 percent and 39.5 percent

• operating expenses between $6 billion and $6.1 billion

• other income/(expense) of $325 million

• tax rate of 25.5 percent

Apple’s board of directors has declared a cash dividend of $.52 per share of the Company’s common stock. The dividend is payable on February 11, 2016, to shareholders of record as of the close of business on February 8, 2016.

Apple will provide live streaming of its Q1 2016 financial results conference call beginning at 2:00 p.m. PST on January 26, 2016 at www.apple.com/investor/earnings-call/. This webcast will also be available for replay for approximately two weeks thereafter.

Q1’16 Earnings Supplemental Material

This press release contains forward-looking statements including without limitation those about the Company’s estimated revenue, gross margin, operating expenses, other income/(expense), and tax rate. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include without limitation the effect of competitive and economic factors, and the Company’s reaction to those factors, on consumer and business buying decisions with respect to the Company’s products; continued competitive pressures in the marketplace; the ability of the Company to deliver to the marketplace and stimulate customer demand for new programs, products, and technological innovations on a timely basis; the effect that product introductions and transitions, changes in product pricing or mix, and/or increases in component costs could have on the Company’s gross margin; the inventory risk associated with the Company’s need to order or commit to order product components in advance of customer orders; the continued availability on acceptable terms, or at all, of certain components and services essential to the Company’s business currently obtained by the Company from sole or limited sources; the effect that the Company’s dependency on manufacturing and logistics services provided by third parties may have on the quality, quantity or cost of products manufactured or services rendered; risks associated with the Company’s international operations; the Company’s reliance on third-party intellectual property and digital content; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; the Company’s dependency on the performance of distributors, carriers and other resellers of the Company’s products; the effect that product and service quality problems could have on the Company’s sales and operating profits; the continued service and availability of key executives and employees; war, terrorism, public health issues, natural disasters, and other circumstances that could disrupt supply, delivery, or demand of products; and unfavorable results of legal proceedings. More information on potential factors that could affect the Company’s financial results is included from time to time in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s public reports filed with the SEC, including the Company’s Form 10-K for the fiscal year ended September 26, 2015, and its Form 10-Q for the fiscal quarter ended December 26, 2015 to be filed with the SEC. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

Apple revolutionized personal technology with the introduction of the Macintosh in 1984. Today, Apple leads the world in innovation with iPhone, iPad, Mac, Apple Watch and Apple TV. Apple’s four software platforms — iOS, OS X, watchOS and tvOS — provide seamless experiences across all Apple devices and empower people with breakthrough services including the App Store, Apple Music, Apple Pay and iCloud. Apple’s 100,000 employees are dedicated to making the best products on earth, and to leaving the world better than we found it.

Press Contact:

Kristin Huguet

Apple

khuguet@apple.com

(408) 974-2414

Investor Relations Contacts:

Nancy Paxton

Apple

paxton1@apple.com

(408) 974-5420

Joan Hoover

Apple

hoover1@apple.com

(408) 974-4570

NOTE TO EDITORS: For additional information visit Apple’s PR website (www.apple.com/pr), or call Apple’s Media Helpline at (408) 974-2042.

© 2016 Apple Inc. All rights reserved. Apple and the Apple logo are trademarks of Apple. Other company and product names may be trademarks of their respective owners.

Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except number of shares which are reflected in thousands and per share amounts)

	Three Months Ended
	December 26, 2015		December 27, 2014
Net sales	$	75,872	$	74,599
Cost of sales (1)		45,449		44,858
Gross margin		30,423		29,741
Operating expenses:
Research and development (1)		2,404		1,895
Selling, general and administrative (1)		3,848		3,600
Total operating expenses		6,252		5,495
Operating income		24,171		24,246
Other income/(expense), net		402		170
Income before provision for income taxes		24,573		24,416
Provision for income taxes		6,212		6,392
Net income	$	18,361	$	18,024
Earnings per share:
Basic	$	3.30	$	3.08
Diluted	$	3.28	$	3.06
Shares used in computing earnings per share:
Basic		5,558,930		5,843,082
Diluted		5,594,127		5,881,803
Cash dividends declared per share	$	0.52	$	0.47
(1) Includes share-based compensation expense as follows:
Cost of sales	$	204	$	140
Research and development	$	466	$	374
Selling, general and administrative	$	408	$	374

Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except number of shares which are reflected in thousands and par value)

	December 26, 2015			September 26, 2015
ASSETS:
Current assets:
Cash and cash equivalents	$	16,689		$	21,120
Short-term marketable securities		21,385			20,481
Accounts receivable, less allowances of $63 in each period		12,953			16,849
Inventories		2,451			2,349
Vendor non-trade receivables		11,668			13,494
Other current assets		11,073			15,085
Total current assets		76,219			89,378
Long-term marketable securities		177,665			164,065
Property, plant and equipment, net		22,300			22,471
Goodwill		5,202			5,116
Acquired intangible assets, net		3,924			3,893
Other non-current assets		7,974			5,556
Total assets	$	293,284		$	290,479
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
Accounts payable	$	33,312		$	35,490
Accrued expenses		24,032			25,181
Deferred revenue		8,989			8,940
Commercial paper		7,259			8,499
Current portion of long-term debt		2,500			2,500
Total current liabilities		76,092			80,610
Deferred revenue, non-current		3,546			3,624
Long-term debt		53,204			53,463
Other non-current liabilities		32,175			33,427
Total liabilities		165,017			171,124
Commitments and contingencies
Shareholders’ equity:
Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 5,544,487 and 5,578,753 shares issued and outstanding, respectively		28,253			27,416
Retained earnings		101,494			92,284
Accumulated other comprehensive income/(loss)		(1,480	)		(345	)
Total shareholders’ equity		128,267			119,355
Total liabilities and shareholders’ equity	$	293,284		$	290,479

Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

	Three Months Ended
	December 26, 2015			December 27, 2014
Cash and cash equivalents, beginning of the period	$	21,120		$	13,844
Operating activities:
Net income		18,361			18,024
Adjustments to reconcile net income to cash generated by operating activities:
Depreciation and amortization		2,954			2,575
Share-based compensation expense		1,078			888
Deferred income tax expense		1,592			2,197
Changes in operating assets and liabilities:
Accounts receivable, net		3,896			751
Inventories		(102	)		(172	)
Vendor non-trade receivables		1,826			(3,508	)
Other current and non-current assets		(893	)		(1,648	)
Accounts payable		(852	)		9,003
Deferred revenue		(29	)		945
Other current and non-current liabilities		(368	)		4,667
Cash generated by operating activities		27,463			33,722
Investing activities:
Purchases of marketable securities		(47,836	)		(44,915	)
Proceeds from maturities of marketable securities		3,514			2,807
Proceeds from sales of marketable securities		28,262			24,166
Payments made in connection with business acquisitions, net		(86	)		(23	)
Payments for acquisition of property, plant and equipment		(3,612	)		(3,217	)
Payments for acquisition of intangible assets		(394	)		(48	)
Other		(298	)		65
Cash used in investing activities		(20,450	)		(21,165	)
Financing activities:
Proceeds from issuance of common stock		1			80
Excess tax benefits from equity awards		224			264
Payments for taxes related to net share settlement of equity awards		(597	)		(512	)
Payments for dividends and dividend equivalents		(2,969	)		(2,801	)
Repurchase of common stock		(6,863	)		(5,030	)
Proceeds from issuance of term debt, net		0			3,485
Change in commercial paper, net		(1,240	)		(2,409	)
Cash used in financing activities		(11,444	)		(6,923	)
Increase/(decrease) in cash and cash equivalents		(4,431	)		5,634
Cash and cash equivalents, end of the period	$	16,689		$	19,478
Supplemental cash flow disclosure:
Cash paid for income taxes, net	$	3,398		$	3,869
Cash paid for interest	$	396		$	202

EX-99.2

Exhibit 99.2

Apple Inc.

Q1 2016 Unaudited Summary Data

(Units in thousands, Revenue in millions)

	Q1 2016				Q4 2015				Q1 2015				Sequential Change				Year/Year Change
			Revenue				Revenue				Revenue				Revenue				Revenue
Operating Segments
Americas			$	29,325			$	21,773			$	30,566				35%				- 4%
Europe				17,932				10,577				17,214				70%				4%
Greater China				18,373				12,518				16,144				47%				14%
Japan				4,794				3,929				5,448				22%				- 12%
Rest of Asia Pacific				5,448				2,704				5,227				101%				4%
Total Apple			$	75,872			$	51,501			$	74,599				47%				2%
	Q1 2016				Q4 2015				Q1 2015				Sequential Change				Year/Year Change
	Units		Revenue		Units		Revenue		Units		Revenue		Units		Revenue		Units		Revenue
Product Summary
iPhone (1)		74,779	$	51,635		48,046	$	32,209		74,468	$	51,182		56%		60%		0%		1%
iPad (1)		16,122		7,084		9,883		4,276		21,419		8,985		63%		66%		- 25%		- 21%
Mac (1)		5,312		6,746		5,709		6,882		5,519		6,944		- 7%		- 2%		- 4%		- 3%
Services (2)				6,056				5,086				4,799				19%				26%
Other Products (1)(3)				4,351				3,048				2,689				43%				62%
Total Apple			$	75,872			$	51,501			$	74,599				47%				2%

(1) Includes deferrals and amortization of related software upgrade rights and non-software services.

(2) Includes revenue from Internet 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.

EX-99.3

Exhibit 99.3

Q1’16 Earnings
Supplemental Material
January 26, 2016

Currency Index
$100 of Apple’s non-U.S. dollar revenue in Q4’14 translates into only $85 U.S. dollars today
Q4’14 = 100
100 100
95 95
90 90
85 85
Q4’14 Q1’16
The currency index is based on the average exchange rate per quarter weighted by Apple’s non-U.S. dollar revenue for each quarter. 1

Q1’16 Constant Currency Revenue Growth
In constant currency, Q1’16 revenue would have been $5 billion higher, reflecting an 8% Y/Y increase
$ in Billions
As Reported In Constant Currency (1)
Operating Segments Q1’16 Revenue Q1’15 Revenue (Non-GAAP) Y/Y Q1’16 Revenue Y/Y (Non-GAAP)
Americas $29.3 $30.6 -4% $30.2 -1%
Europe 17.9 17.2 4% 20.2 18%
Greater China 18.4 16.1 14% 19.0 17%
Japan 4.8 5.4 -12% 5.3 -4%
Rest of Asia Pacific 5.4 5.2 4% 6.2 19%
Total Apple $75.9 $74.6 2% $80.8 8%
Reconciliation from GAAP Revenue to Non-GAAP Constant Currency Revenue (1)
Americas Europe Greater China Japan Rest of Asia Pacific Total Apple
Q1’16 Revenue (GAAP) $29.3 $17.9 $18.4 $4.8 $5.4 $75.9
Foreign exchange effect on revenue 0.8 2.3 0.6 0.5 0.8 5.0
Q1’16 Constant Currency Revenue (Non-GAAP) $30.2 $20.2 $19.0 $5.3 $6.2 $80.8
Q1’15 Revenue (GAAP) $30.6 $17.2 $16.1 $5.4 $5.2 $74.6
Constant Currency Revenue Growth (Non-GAAP) -1% 18% 17% -4% 19% 8%
(1) Apple calculates non-GAAP constant currency revenue by translating current quarter local currency revenue to U.S. dollars based on prior period average exchange rates. That amount is compared to prior period GAAP revenue to derive non-GAAP constant currency revenue growth (expressed as a percentage). Apple considers non-GAAP constant currency revenue and revenue growth to be useful metrics to investors and management as they facilitate a more useful comparison of current performance to historical performance.
Note: Numbers may not add precisely due to rounding. 2

Services Revenue
Apple’s installed base drove over $31 billion in related purchases in FY15, up 23% Y/Y, and almost $9 billion in Q1’16, up 24% Y/Y
$ in Billions FY14 FY15 Q1’16 (1)
Services Revenue $18.1 $19.9 $5.5
Y/Y Change 10% 15%
Services Revenue Driven by Installed Base:
iTunes Purchased Content
Apple Music
App Store
Licensing
Service PartsiCloud
Apple Pay
Installed Base Related Revenue $14.9 $16.8 $4.7
Adjustment to Reflect Certain Unrecognized Services Purchases (2) $10.5 $14.3 $4.2
Installed Base Related Purchases $25.3 $31.2 $8.9
Y/Y Change 23% 24%
(1) Amounts exclude $548 million received from a patent infringement lawsuit.
(2) For third-party applications sold through the App Store and certain digital content sold through the iTunes Store, Apple accounts for such purchases on a net basis by recognizing in Services revenue only the commission it retains from each purchase. This non-GAAP adjustment reflects the portion of the gross amounts billed to customers that Apple remits to third-party app developers and certain digital content owners. Apple considers non-GAAP installed base related purchases to be a useful metric for investors and management as it provides a more complete picture of the transactions generated by the installed base.
Note: Numbers may not add precisely due to rounding.
3

Active Installed Base
1 Billion
iPhone, iPad, Mac, iPod touch, Apple TV, and Apple Watch devices
that have been engaged with our services within the past 90 days.
4

Non-GAAP Measures
The presentation of non-GAAP financial measures in this supplemental material is not intended to be considered in isolation or as a substitute for, or superior to, Apple’s GAAP financial information, and investors are cautioned that the non-GAAP financial measures are limited in their usefulness, may be unique to Apple, should be considered only as a supplement to Apple’s GAAP financial measures and do not reflect any positive or negative trend in the Company’s performance.
5