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 25, 2010

Date of Report (date of earliest event reported)

APPLE INC.

(Exact name of Registrant as specified in its charter)

California	000-10030	94-2404110
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)

1 Infinite Loop, Cupertino, CA 95014

(Address of principal executive offices)

(408) 996-1010

(Registrant’s telephone number, including area code)

(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 25, 2010, Apple Inc. (“Apple”) issued a press release regarding Apple’s financial results for its first fiscal quarter ended December 26, 2009 and a related data sheet. 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. A copy of the selected quarterly financial schedules is attached hereto as Exhibit 99.3.

On September 23, 2009, the Financial Accounting Standards Board ratified Emerging Issues Task Force (“EITF”) Issue 08-1 and EITF Issue 09-3, resulting in the issuance of accounting standard updates ASU 2009-13 and ASU 2009-14. Apple was required to adopt the new accounting standards no later than the first quarter of fiscal 2011. Apple elected to adopt the new standards during the first quarter of fiscal 2010, as reflected in its Quarterly Report on Form 10-Q for the quarter ended December 26, 2009, which was filed with the SEC on January 25, 2010. The Company also filed a Form 10-K/A to amend its Form 10-K for the year ended September 26, 2009 solely to reflect the retrospective adoption of the new accounting standards to the periods presented in that report.

Additionally included in this Form 8-K are selected quarterly financial schedules reflecting the impact of retrospective adoption of the new accounting standards and reconciling the application of old and new accounting principles to historical income statements, balance sheets, cash flow from operations, deferred revenue and summary data information. These financial schedules are attached hereto as Exhibit 99.3 and will also be available on the Company’s website at www.apple.com/investor.

The new accounting principles result in the Company’s recognition of substantially all of the revenue and product cost for iPhone and Apple TV when those products are delivered to customers. Under historical accounting principles, the Company was required to account for sales of both iPhone and Apple TV using subscription accounting because the Company indicated it might from time-to-time provide future unspecified software upgrades and features for those products free of charge. Under subscription accounting, revenue and associated product cost of sales for iPhone and Apple TV were deferred at the time of sale and recognized on a straight-line basis over each product’s estimated economic life. This resulted in the deferral of significant amounts of revenue and cost of sales related to iPhone and Apple TV.

Because Apple began selling both iPhone and Apple TV in fiscal 2007, the Company retrospectively adopted the new accounting principles as if the new accounting principles had been applied in all prior periods. Consequently, the financial results of each quarter from fiscal 2007 through fiscal 2009 have been revised. The Company believes retrospective adoption provides analysts and investors the most comparable and useful financial information and better reflects the underlying performance of the Company’s business.

For additional information refer to the “Explanatory Note” in Apple’s Amendment No. 1 to its Annual Report on Form 10-K for the year ended September 26, 2009.

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.

The following exhibits are furnished herewith:

Exhibit Number	Description
99.1	Text of press release issued by Apple Inc. dated January 25, 2010.
99.2	Data sheet issued by Apple Inc. dated January 25, 2010.
99.3	Selected quarterly financial schedules issued by Apple Inc. dated January 25, 2010.

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.

	APPLE INC.
Date: January 25, 2010
	By:	/s/ Peter Oppenheimer
		Peter Oppenheimer Senior Vice President, Chief Financial Officer

EXHIBIT INDEX

Exhibit Number	Description
99.1	Text of press release issued by Apple Inc. dated January 25, 2010.
99.2	Data sheet issued by Apple Inc. dated January 25, 2010.
99.3	Selected quarterly financial schedules issued by Apple Inc. dated January 25, 2010.

EX-99.1

Exhibit 99.1

Apple Reports First Quarter Results

All-Time Highest Revenue and Profit

New Accounting Standards Adopted

CUPERTINO, California—January 25, 2010—Apple^® today announced financial results for its fiscal 2010 first quarter ended December 26, 2009. The Company posted revenue of $15.68 billion and a net quarterly profit of $3.38 billion, or $3.67 per diluted share. These results compare to revenue of $11.88 billion and net quarterly profit of $2.26 billion, or $2.50 per diluted share, in the year-ago quarter. Gross margin was 40.9 percent, up from 37.9 percent in the year-ago quarter. International sales accounted for 58 percent of the quarter’s revenue.

Apple sold 3.36 million Macintosh^® computers during the quarter, representing a 33 percent unit increase over the year-ago quarter. The Company sold 8.7 million iPhones in the quarter, representing 100 percent unit growth over the year-ago quarter. Apple sold 21 million iPods during the quarter, representing an eight percent unit decline from the year-ago quarter.

During the quarter Apple elected retrospective adoption of the Financial Accounting Standards Board’s amended accounting standards* related to certain revenue recognition. Adoption of the new accounting standards significantly changes how the Company accounts for certain items, particularly sales of iPhone^® and Apple TV^®.

“If you annualize our quarterly revenue, it’s surprising that Apple is now a $50+ billion company,” said Steve Jobs, Apple’s CEO. “The new products we are planning to release this year are very strong, starting this week with a major new product that we’re really excited about.”

“We are very pleased to have generated $5.8 billion in cash during the quarter,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the second fiscal quarter of 2010, we expect revenue in the range of about $11.0 billion to $11.4 billion and we expect diluted earnings per share in the range of about $2.06 to $2.18.”

Apple will provide live streaming of its Q1 2010 financial results conference call utilizing QuickTime^®, Apple’s standards-based technology for live and on-demand audio and video streaming. The live webcast will begin at 2:00 p.m. PST on January 25, 2010 at www.apple.com/quicktime/qtv/earningsq110/ and will also be available for replay for approximately two weeks thereafter.

*Retrospective Adoption of Amended Accounting Standards

On September 23, 2009, the Financial Accounting Standards Board ratified Emerging Issues Task Force (EITF) Issue 08-1 and EITF Issue 09-3, resulting in the issuance of accounting standard updates ASU 2009-13 and ASU 2009-14. Apple was required to adopt the new accounting standards no later than the first quarter of fiscal 2011. Apple elected to adopt the new standards during the first quarter of fiscal 2010, as reflected in its Quarterly Report on Form 10-Q for the quarter ended December 26, 2009, which was filed with the SEC on January 25, 2010. The Company also filed a Form 10-K/A to amend its Form 10-K for the year ended September 26, 2009 solely to reflect the retrospective adoption of the new accounting standards to the periods presented in that report. Additionally, Apple filed a Form 8-K that included selected quarterly financial schedules reflecting the impact of retrospective adoption of the new accounting standards and reconciling the application of old and new accounting principles to historical income statements, balance sheets, cash flow from operations, deferred revenue and summary data information. These financial schedules will also be available on the Company’s website at www.apple.com/investor.

The new accounting principles result in the Company’s recognition of substantially all of the revenue and product cost for iPhone and Apple TV when those products are delivered to customers. Under historical accounting principles, the Company was required to account for sales of both iPhone and Apple TV using subscription accounting because the Company indicated it might from time to time provide future unspecified software upgrades and features for those products free of charge. Under subscription accounting, revenue and associated product cost of sales for iPhone and Apple TV were deferred at the time of sale and recognized on a straight-line basis over each product’s estimated economic life. This resulted in the deferral of significant amounts of revenue and cost of sales related to iPhone and Apple TV.

Because Apple began selling both iPhone and Apple TV in fiscal 2007, the Company retrospectively adopted the new accounting principles as if the new accounting principles had been applied in all prior periods. Consequently, the financial results of each quarter from fiscal 2007 through fiscal 2009 have been revised. The Company believes retrospective adoption provides analysts and investors the most comparable and useful financial information and better reflects the underlying performance of the Company’s business.

For additional information refer to the “Explanatory Note” in Apple’s Amendment No. 1 to its Annual Report on Form 10-K for the year ended September 26, 2009.

This press release contains forward-looking statements including without limitation those about the Company’s estimated revenue and earnings per share. 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 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; the Company’s reliance on the availability of third-party digital content and applications; 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 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 Company’s reliance on sole service providers for iPhone in certain countries; the continued service and availability of key executives and employees; war, terrorism, public health issues, and other circumstances that could disrupt supply, delivery, or demand of products; potential litigation from the matters investigated by the special committee of the board of directors and the restatement of the Company’s consolidated financial statements; and unfavorable results of other legal proceedings. More information on potential factors that could affect the Company’s financial results is included from time to time in the Company’s public reports filed with the SEC, including the Company’s Form 10-K for the fiscal year ended September 26, 2009 and its Form 10-Q for the quarter ended December 26, 2009. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning computers, OS X operating system and iLife and professional applications. Apple is also spearheading the digital media revolution with its iPod portable music and video players and iTunes online store, and has entered the mobile phone market with its revolutionary iPhone.

Press Contact:

Steve Dowling

Apple

dowling@apple.com

(408) 974-1896

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.

^© 2010 Apple Inc. All rights reserved. Apple, the Apple logo, Mac, Mac OS, Macintosh, iPhone, Apple TV and QuickTime are trademarks of Apple. Other company and product names may be trademarks of their respective owners.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

	Three Months Ended
	December 26, 2009 (2)		December 27, 2008 (2)
Net sales	$	15,683	$	11,880
Cost of sales (1)		9,272		7,373
Gross margin		6,411		4,507
Operating expenses:
Research and development (1)		398		315
Selling, general and administrative (1)		1,288		1,091
Total operating expenses		1,686		1,406
Operating income		4,725		3,101
Other income and expense		33		158
Income before provision for income taxes		4,758		3,259
Provision for income taxes		1,380		1,004
Net income	$	3,378	$	2,255
Earnings per common share:
Basic	$	3.74	$	2.54
Diluted	$	3.67	$	2.50
Shares used in computing earnings per share:
Basic		903,542		889,142
Diluted		919,783		901,494
(1)     Includes stock-based compensation expense as follows:
Cost of sales	$	37	$	28
Research and development	$	74	$	60
Selling, general and administrative	$	94	$	82

(2) In September 2009, the Financial Accounting Standards Board amended the accounting principles related to revenue recognition for arrangements with multiple deliverables and arrangements that include software elements. Apple adopted the new accounting principles on a retrospective basis during the first quarter of 2010. The new accounting principles significantly change how Apple accounts for certain revenue arrangements that include both hardware and software elements. The impact of the new accounting principles is reflected for all periods included above. For additional information refer to the “Explanatory Note” in Apple’s Amendment No. 1 to the Annual Report on Form 10-K for the year ended September 26, 2009.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except share amounts)

	December 26,  2009 (1)		September 26, 2009 (1)
ASSETS:
Current assets:
Cash and cash equivalents	$	7,609	$	5,263
Short-term marketable securities		17,187		18,201
Accounts receivable, less allowances of $54 and $52, respectively		3,090		3,361
Inventories		576		455
Deferred tax assets		1,180		1,135
Other current assets		3,690		3,140
Total current assets		33,332		31,555
Long-term marketable securities		15,024		10,528
Property, plant and equipment, net		3,115		2,954
Goodwill		253		206
Acquired intangible assets, net		241		247
Other assets		1,961		2,011
Total assets	$	53,926	$	47,501
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
Accounts payable	$	6,511	$	5,601
Accrued expenses		3,996		3,852
Deferred revenue		2,590		2,053
Total current liabilities		13,097		11,506
Deferred revenue – non-current		922		853
Other non-current liabilities		4,139		3,502
Total liabilities		18,158		15,861
Commitments and contingencies
Shareholders’ equity:
Common stock, no par value; 1,800,000,000 shares authorized; 906,282,182 and 899,805,500 shares issued and outstanding, respectively		8,962		8,210
Retained earnings		26,695		23,353
Accumulated other comprehensive income		111		77
Total shareholders’ equity		35,768		31,640
Total liabilities and shareholders’ equity	$	53,926	$	47,501

(1) In September 2009, the Financial Accounting Standards Board amended the accounting principles related to revenue recognition for arrangements with multiple deliverables and arrangements that include software elements. Apple adopted the new accounting principles on a retrospective basis during the first quarter of 2010. The new accounting principles significantly change how Apple accounts for certain revenue arrangements that include both hardware and software elements. The impact of the new accounting principles is reflected for all periods included above. For additional information refer to the “Explanatory Note” in Apple’s Amendment No. 1 to the Annual Report on Form 10-K for the year ended September 26, 2009.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

	Three Months Ended
	December 26, 2009 (1)			December 27, 2008 (1)
Cash and cash equivalents, beginning of the period	$	5,263		$	11,875
Operating activities:
Net income		3,378			2,255
Adjustments to reconcile net income to cash generated by operating activities:
Depreciation, amortization and accretion		209			168
Stock-based compensation expense		205			170
Deferred income tax expense		425			276
Loss on disposition of property, plant and equipment		6			7
Changes in operating assets and liabilities:
Accounts receivable, net		271			226
Inventories		(121	)		113
Other current assets		(517	)		1,097
Other assets		47			7
Accounts payable		956			(767	)
Deferred revenue		606			200
Other liabilities		316			186
Cash generated by operating activities		5,781			3,938
Investing activities:
Purchases of marketable securities		(12,922	)		(13,082	)
Proceeds from maturities of marketable securities		6,216			2,226
Proceeds from sales of marketable securities		3,199			2,668
Purchases of other long-term investments		(6	)		(38	)
Payment for acquisition of property, plant and equipment		(376	)		(339	)
Payment for acquisition of intangible assets		(5	)		(14	)
Other		(64	)		(60	)
Cash used in investing activities		(3,958	)		(8,639	)
Financing activities:
Proceeds from issuance of common stock		374			77
Excess tax benefits from stock-based compensation		252			19
Cash used to net share settle equity awards		(103	)		(34	)
Cash generated by financing activities		523			62
Increase/(decrease) in cash and cash equivalents		2,346			(4,639	)
Cash and cash equivalents, end of the period	$	7,609		$	7,236
Supplemental cash flow disclosure:
Cash paid for income taxes, net	$	980		$	550

(1) In September 2009, the Financial Accounting Standards Board amended the accounting principles related to revenue recognition for arrangements with multiple deliverables and arrangements that include software elements. Apple adopted the new accounting principles on a retrospective basis during the first quarter of 2010. The new accounting principles significantly change how Apple accounts for certain revenue arrangements that include both hardware and software elements. The impact of the new accounting principles is reflected for all periods included above. For additional information refer to the “Explanatory Note” in Apple’s Amendment No. 1 to the Annual Report on Form 10-K for the year ended September 26, 2009.

EX-99.2

Exhibit 99.2

Apple Inc.

Q1 2010 Unaudited Summary Data ⁽¹⁾

	Q4 2009			Q1 2009			Q1 2010			Sequential Change				Year/Year Change
	CPU Units K	Revenue $M		CPU Units K	Revenue $M		CPU Units K	Revenue $M		CPU Units		Revenue		CPU Units		Revenue
Operating Segments
Americas	1,252	$	5,236	912	$	5,301	1,187	$	6,092	- 5	%	16	%	30	%	15	%
Europe	761		3,235	795		3,585	1,068		5,024	40	%	55	%	34	%	40	%
Japan	79		634	99		498	105		783	33	%	24	%	6	%	57	%
Asia Pacific	291		1,061	203		750	313		1,813	8	%	71	%	54	%	142	%
Retail	670		2,041	515		1,746	689		1,971	3	%	- 3	%	34	%	13	%
Total Operating Segments	3,053	$	12,207	2,524	$	11,880	3,362	$	15,683	10	%	28	%	33	%	32	%
	Units K	Revenue $M		Units K	Revenue $M		Units K	Revenue $M		Sequential Change				Year/Year Change
										Units		Revenue		Units		Revenue
Product Summary
Desktops (2)	787	$	1,089	728	$	1,045	1,234	$	1,692	57	%	55	%	70	%	62	%
Portables (3)	2,266		2,891	1,796		2,520	2,128		2,758	- 6	%	- 5	%	18	%	9	%
Subtotal CPUs	3,053		3,980	2,524		3,565	3,362		4,450	10	%	12	%	33	%	25	%
iPod	10,177		1,563	22,727		3,371	20,970		3,391	106	%	117	%	- 8	%	1	%
Other Music Related Products and Services (4)			1,018			1,011			1,164			14	%			15	%
iPhone and Related Products and Services (5)	7,367		4,606	4,363		2,940	8,737		5,578	19	%	21	%	100	%	90	%
Peripherals and Other Hardware			391			387			469			20	%			21	%
Software, Service and Other Sales			649			606			631			- 3	%			4	%
Total Apple		$	12,207		$	11,880		$	15,683			28	%			32	%

(1) In September 2009, the Financial Accounting Standards Board amended the accounting principles related to revenue recognition for arrangements with multiple deliverables and arrangements that include software elements. Apple adopted the new accounting principles on a retrospective basis during the first quarter of 2010. The new accounting principles significantly change how Apple accounts for certain revenue arrangements that include both hardware and software elements. The impact of the new accounting principles is reflected for all periods above. For additional information refer to the “Explanatory Note” in Apple’s Amendment No. 1 to the Annual Report on Form 10-K for the year ended September 26, 2009.

(2) Includes iMac, Mac mini, Mac Pro and Xserve product lines.

(3) Includes MacBook, MacBook Air and MacBook Pro product lines.

(4) Consists of iTunes Store sales, iPod services, and Apple-branded and third-party iPod accessories.

(5) Units consist of iPhone handset sales; Revenue is derived from handset sales, carrier agreements, and Apple-branded and third-party iPhone accessories.

K = Units in thousands

$M = Amounts in millions

EX-99.3

Exhibit 99.3

Apple Inc.

Revised Quarterly Income Statement Information

($ in millions, units in thousands, except per share amounts)

	Q1 2007			Q2 2007			Q3 2007		Q4 2007			FY 2007
iPhone Unit Sales		-			-			270		1,119			1,389
New Accounting (a)
Net Sales	$	7,123		$	5,286		$	5,563	$	6,606		$	24,578
Cost of Sales		4,900			3,435			3,530		4,561			16,426
Gross Margin		2,223			1,851			2,033		2,045			8,152
Operating Expenses:
Research and Development		184			183			208		207			782
Selling, General and Administrative		714			680			746		823			2,963
Total Operating Expenses		898			863			954		1,030			3,745
Operating Income		1,325			988			1,079		1,015			4,407
Other Income and Expense		126			148			155		170			599
Income Before Provision for Income Taxes		1,451			1,136			1,234		1,185			5,006
Provision for Income Taxes		440			362			394		315			1,511
Net Income	$	1,011		$	774		$	840	$	870		$	3,495
Earnings Per Common Share:
Basic	$	1.18		$	0.90		$	0.97	$	1.00		$	4.04
Diluted	$	1.14		$	0.87		$	0.94	$	0.97		$	3.93
Old Accounting
Net Sales	$	7,115		$	5,264		$	5,410	$	6,217		$	24,006
Cost of Sales		4,895			3,415			3,415		4,127			15,852
Gross Margin		2,220			1,849			1,995		2,090			8,154
Operating Expenses:
Research and Development		184			183			208		207			782
Selling, General and Administrative		714			680			746		823			2,963
Total Operating Expenses		898			863			954		1,030			3,745
Operating Income		1,322			986			1,041		1,060			4,409
Other Income and Expense		126			148			155		170			599
Income Before Provision for Income Taxes		1,448			1,134			1,196		1,230			5,008
Provision for Income Taxes		444			364			378		326			1,512
Net Income	$	1,004		$	770		$	818	$	904		$	3,496
Earnings Per Common Share:
Basic	$	1.17		$	0.89		$	0.94	$	1.04		$	4.04
Diluted	$	1.14		$	0.87		$	0.92	$	1.01		$	3.93
Adjustments (a)
Net Sales	$	8		$	22		$	153	$	389		$	572
Cost of Sales		5			20			115		434			574
Gross Margin		3			2			38		(45	)		(2	)
Operating Expenses:
Research and Development		-			-			-		-			-
Selling, General and Administrative		-			-			-		-			-
Total Operating Expenses		-			-			-		-			-
Operating Income		3			2			38		(45	)		(2	)
Other Income and Expense		-			-			-		-			-
Income Before Provision for Income Taxes		3			2			38		(45	)		(2	)
Provision for Income Taxes		(4	)		(2	)		16		(11	)		(1	)
Net Income	$	7		$	4		$	22	$	(34	)	$	(1	)
Earnings Per Common Share:
Basic	$	0.01		$	0.01		$	0.03	$	(0.04	)	$	-
Diluted	$	-		$	-		$	0.02	$	(0.04	)	$	-

(a) In September 2009, the Financial Accounting Standards Board amended the accounting principles related to revenue recognition for arrangements with multiple deliverables and arrangements that include software elements. Apple adopted the new accounting principles on a retrospective basis during the first quarter of 2010. The new accounting principles significantly change how Apple accounts for certain revenue arrangements that include both hardware and software elements. The impact of the new accounting principles is reflected for all periods included in the above schedule. For additional information refer to the “Explanatory Note” in Apple’s Amendment No. 1 to its Annual Report on Form 10-K for the year ended September 26, 2009.

Apple Inc.

Revised Quarterly Income Statement Information

($ in millions, units in thousands, except per share amounts)

	Q1 2008		Q2 2008		Q3 2008			Q4 2008		FY 2008
iPhone Unit Sales		2,315		1,703		717			6,892		11,627
New Accounting (a)
Net Sales	$	10,430	$	7,980	$	7,561		$	11,520	$	37,491
Cost of Sales		7,026		5,373		4,818			7,077		24,294
Gross Margin		3,404		2,607		2,743			4,443		13,197
Operating Expenses:
Research and Development		246		273		292			298		1,109
Selling, General and Administrative		960		886		916			999		3,761
Total Operating Expenses		1,206		1,159		1,208			1,297		4,870
Operating Income		2,198		1,448		1,535			3,146		8,327
Other Income and Expense		200		162		118			140		620
Income Before Provision for Income Taxes		2,398		1,610		1,653			3,286		8,947
Provision for Income Taxes		758		509		522			1,039		2,828
Net Income	$	1,640	$	1,101	$	1,131		$	2,247	$	6,119
Earnings Per Common Share:
Basic	$	1.87	$	1.25	$	1.28		$	2.53	$	6.94
Diluted	$	1.82	$	1.22	$	1.25		$	2.48	$	6.78
Old Accounting
Net Sales	$	9,608	$	7,512	$	7,464		$	7,895	$	32,479
Cost of Sales		6,276		5,038		4,864			5,156		21,334
Gross Margin		3,332		2,474		2,600			2,739		11,145
Operating Expenses:
Research and Development		246		273		292			298		1,109
Selling, General and Administrative		960		886		916			999		3,761
Total Operating Expenses		1,206		1,159		1,208			1,297		4,870
Operating Income		2,126		1,315		1,392			1,442		6,275
Other Income and Expense		200		162		118			140		620
Income Before Provision for Income Taxes		2,326		1,477		1,510			1,582		6,895
Provision for Income Taxes		745		432		438			446		2,061
Net Income	$	1,581	$	1,045	$	1,072		$	1,136	$	4,834
Earnings Per Common Share:
Basic	$	1.81	$	1.19	$	1.21		$	1.28	$	5.48
Diluted	$	1.76	$	1.16	$	1.19		$	1.26	$	5.36
Adjustments (a)
Net Sales	$	822	$	468	$	97		$	3,625	$	5,012
Cost of Sales		750		335		(46	)		1,921		2,960
Gross Margin		72		133		143			1,704		2,052
Operating Expenses:
Research and Development		-		-		-			-		-
Selling, General and Administrative		-		-		-			-		-
Total Operating Expenses		-		-		-			-		-
Operating Income		72		133		143			1,704		2,052
Other Income and Expense		-		-		-			-		-
Income Before Provision for Income Taxes		72		133		143			1,704		2,052
Provision for Income Taxes		13		77		84			593		767
Net Income	$	59	$	56	$	59		$	1,111	$	1,285
Earnings Per Common Share:
Basic	$	0.06	$	0.06	$	0.07		$	1.25	$	1.46
Diluted	$	0.06	$	0.06	$	0.06		$	1.22	$	1.42

(a) In September 2009, the Financial Accounting Standards Board amended the accounting principles related to revenue recognition for arrangements with multiple deliverables and arrangements that include software elements. Apple adopted the new accounting principles on a retrospective basis during the first quarter of 2010. The new accounting principles significantly change how Apple accounts for certain revenue arrangements that include both hardware and software elements. The impact of the new accounting principles is reflected for all periods included in the above schedule. For additional information refer to the “Explanatory Note” in Apple’s Amendment No. 1 to its Annual Report on Form 10-K for the year ended September 26, 2009.

Apple Inc.

Revised Quarterly Income Statement Information

($ in millions, units in thousands, except per share amounts)

	Q1 2009		Q2 2009		Q3 2009		Q4 2009		FY 2009
iPhone Unit Sales		4,363		3,793		5,208		7,367		20,731
New Accounting (a)
Net Sales	$	11,880	$	9,084	$	9,734	$	12,207	$	42,905
Cost of Sales		7,373		5,457		5,751		7,102		25,683
Gross Margin		4,507		3,627		3,983		5,105		17,222
Operating Expenses:
Research and Development		315		319		341		358		1,333
Selling, General and Administrative		1,091		985		1,010		1,063		4,149
Total Operating Expenses		1,406		1,304		1,351		1,421		5,482
Operating Income		3,101		2,323		2,632		3,684		11,740
Other Income and Expense		158		63		60		45		326
Income Before Provision for Income Taxes		3,259		2,386		2,692		3,729		12,066
Provision for Income Taxes		1,004		766		864		1,197		3,831
Net Income	$	2,255	$	1,620	$	1,828	$	2,532	$	8,235
Earnings Per Common Share:
Basic	$	2.54	$	1.82	$	2.05	$	2.82	$	9.22
Diluted	$	2.50	$	1.79	$	2.01	$	2.77	$	9.08
Old Accounting
Net Sales	$	10,167	$	8,163	$	8,337	$	9,870	$	36,537
Cost of Sales		6,635		5,192		5,314		6,256		23,397
Gross Margin		3,532		2,971		3,023		3,614		13,140
Operating Expenses:
Research and Development		315		319		341		358		1,333
Selling, General and Administrative		1,091		985		1,010		1,063		4,149
Total Operating Expenses		1,406		1,304		1,351		1,421		5,482
Operating Income		2,126		1,667		1,672		2,193		7,658
Other Income and Expense		158		63		60		45		326
Income Before Provision for Income Taxes		2,284		1,730		1,732		2,238		7,984
Provision for Income Taxes		679		525		503		573		2,280
Net Income	$	1,605	$	1,205	$	1,229	$	1,665	$	5,704
Earnings Per Common Share:
Basic	$	1.81	$	1.35	$	1.38	$	1.85	$	6.39
Diluted	$	1.78	$	1.33	$	1.35	$	1.82	$	6.29
Adjustments (a)
Net Sales	$	1,713	$	921	$	1,397	$	2,337	$	6,368
Cost of Sales		738		265		437		846		2,286
Gross Margin		975		656		960		1,491		4,082
Operating Expenses:
Research and Development		-		-		-		-		-
Selling, General and Administrative		-		-		-		-		-
Total Operating Expenses		-		-		-		-		-
Operating Income		975		656		960		1,491		4,082
Other Income and Expense		-		-		-		-		-
Income Before Provision for Income Taxes		975		656		960		1,491		4,082
Provision for Income Taxes		325		241		361		624		1,551
Net Income	$	650	$	415	$	599	$	867	$	2,531
Earnings Per Common Share:
Basic	$	0.73	$	0.47	$	0.67	$	0.97	$	2.83
Diluted	$	0.72	$	0.46	$	0.66	$	0.95	$	2.79

(a) In September 2009, the Financial Accounting Standards Board amended the accounting principles related to revenue recognition for arrangements with multiple deliverables and arrangements that include software elements. Apple adopted the new accounting principles on a retrospective basis during the first quarter of 2010. The new accounting principles significantly change how Apple accounts for certain revenue arrangements that include both hardware and software elements. The impact of the new accounting principles is reflected for all periods included in the above schedule. For additional information refer to the “Explanatory Note” in Apple’s Amendment No. 1 to its Annual Report on Form 10-K for the year ended September 26, 2009.

Apple Inc.

Revised Quarterly Balance Sheet Information

($ in millions)

	Q1 2007		Q2 2007		Q3 2007		Q4 2007		Q1 2008		Q2 2008		Q3 2008		Q4 2008			Q1 2009			Q2 2009			Q3 2009			Q4 2009
New Accounting (a)
Current Assets:
Cash and Cash Equivalents	$	7,159	$	7,095	$	7,118	$	9,352	$	9,162	$	9,070	$	9,373	$	11,875		$	7,236		$	4,466		$	5,605		$	5,263
Short-Term Marketable Securities		4,710		5,482		6,649		6,034		9,286		10,378		11,401		10,236			18,411			20,547			18,617			18,201
Accounts Receivable, Net		1,621		928		1,410		1,637		1,939		1,593		1,603		2,422			2,196			1,932			2,686			3,361
Inventories		303		208		251		346		459		364		545		509			396			312			380			455
Deferred Tax Assets		647		635		671		788		976		992		1,005		1,044			1,097			1,065			1,095			1,135
Other Current Assets		2,218		1,650		2,558		3,544		3,704		3,376		2,916		3,920			2,890			2,676			3,015			3,140
Total Current Assets		16,658		15,998		18,657		21,701		25,526		25,773		26,843		30,006			32,226			30,998			31,398			31,555
Long-Term Marketable Securities		-		-		-		-		-		-		-		2,379			2,498			3,865			6,899			10,528
Property, Plant and Equipment, Net		1,362		1,409		1,626		1,832		1,870		1,962		2,177		2,455			2,580			2,546			2,653			2,954
Goodwill		38		38		38		38		38		38		38		207			207			207			207			206
Acquired Intangible Assets, Net		146		240		237		299		311		300		291		285			277			268			259			247
Other Assets		1,251		1,001		945		1,008		1,161		876		774		839			832			1,264			1,585			2,011
Total Assets	$	19,455	$	18,686	$	21,503	$	24,878	$	28,906	$	28,949	$	30,123	$	36,171		$	38,620		$	39,148		$	43,001		$	47,501
Current Liabilities:
Accounts Payable	$	3,885	$	2,403	$	3,660	$	4,970	$	5,366	$	4,154	$	3,683	$	5,520		$	4,715		$	3,976		$	4,854		$	5,601
Accrued Expenses		2,523		2,116		2,237		3,023		3,274		3,283		2,999		4,224			4,391			3,661			3,805			3,852
Deferred Revenue		916		892		969		1,113		1,290		1,326		1,438		1,617			1,771			1,742			1,920			2,053
Total Current Liabilities		7,324		5,411		6,866		9,106		9,930		8,763		8,120		11,361			10,877			9,379			10,579			11,506
Deferred Revenue - Non-Current		376		414		472		554		603		635		665		768			814			771			788			853
Other Non-Current Liabilities		520		589		728		687		1,511		1,384		1,543		1,745			2,179			2,444			2,870			3,502
Total Liabilities		8,220		6,414		8,066		10,347		12,044		10,782		10,328		13,874			13,870			12,594			14,237			15,861
Shareholders’ Equity:
Common Stock		4,594		4,848		5,149		5,368		6,046		6,342		6,831		7,177			7,392			7,643			7,957			8,210
Retained Earnings		6,618		7,392		8,232		9,100		10,742		11,756		12,887		15,129			17,382			19,002			20,826			23,353
Accumulated Other Comprehensive Income/(Loss)		23		32		56		63		74		69		77		(9	)		(24	)		(91	)		(19	)		77
Total Shareholders’ Equity		11,235		12,272		13,437		14,531		16,862		18,167		19,795		22,297			24,750			26,554			28,764			31,640
Total Liabilities and Shareholders’ Equity	$	19,455	$	18,686	$	21,503	$	24,878	$	28,906	$	28,949	$	30,123	$	36,171		$	38,620		$	39,148		$	43,001		$	47,501

(a) In September 2009, the Financial Accounting Standards Board amended the accounting principles related to revenue recognition for arrangements with multiple deliverables and arrangements that include software elements. Apple adopted the new accounting principles on a retrospective basis during the first quarter of 2010. The new accounting principles significantly change how Apple accounts for certain revenue arrangements that include both hardware and software elements. The impact of the new accounting principles is reflected for all periods included in the above schedule. For additional information refer to the “Explanatory Note” in Apple’s Amendment No. 1 to its Annual Report on Form 10-K for the year ended September 26, 2009.

Apple Inc.

Revised Quarterly Balance Sheet Information

($ in millions)

	Q1 2007		Q2 2007		Q3 2007		Q4 2007		Q1 2008		Q2 2008		Q3 2008		Q4 2008		Q1 2009		Q2 2009		Q3 2009		Q4 2009
Old Accounting
Current Assets:
Cash and Cash Equivalents	$	7,159	$	7,095	$	7,118	$	9,352	$	9,162	$	9,070	$	9,373	$	11,875	$	7,236	$	4,466	$	5,605	$	5,263
Short-Term Marketable Securities		4,710		5,482		6,649		6,034		9,286		10,378		11,401		10,236		18,411		20,547		18,617		18,201
Accounts Receivable, Net		1,621		928		1,410		1,637		1,939		1,593		1,603		2,422		2,196		1,932		2,686		3,361
Inventories		303		208		251		346		459		364		545		509		396		312		380		455
Deferred Tax Assets		648		640		687		782		993		1,060		1,131		1,447		1,613		1,539		1,731		2,101
Other Current Assets		2,223		1,676		2,630		3,805		4,350		4,271		3,945		5,822		5,311		5,057		6,151		6,884
Total Current Assets		16,664		16,029		18,745		21,956		26,189		26,736		27,998		32,311		35,163		33,853		35,170		36,265
Long-Term Marketable Securities		-		-		-		-		-		-		-		2,379		2,498		3,865		6,899		10,528
Property, Plant and Equipment, Net		1,362		1,409		1,626		1,832		1,870		1,962		2,177		2,455		2,580		2,546		2,653		2,954
Goodwill		38		38		38		38		38		38		38		207		207		207		207		206
Acquired Intangible Assets, Net		146		240		237		299		311		300		291		285		277		268		259		247
Other Assets		1,251		995		1,001		1,222		1,631		1,435		1,205		1,935		2,062		2,498		2,952		3,651
Total Assets	$	19,461	$	18,711	$	21,647	$	25,347	$	30,039	$	30,471	$	31,709	$	39,572	$	42,787	$	43,237	$	48,140	$	53,851
Current Liabilities:
Accounts Payable	$	3,885	$	2,403	$	3,660	$	4,970	$	5,366	$	4,154	$	3,683	$	5,520	$	4,715	$	3,976	$	4,854	$	5,601
Accrued Expenses		2,528		2,160		2,269		2,919		3,074		3,064		2,808		3,719		3,807		2,761		3,338		3,376
Deferred Revenue		924		922		1,063		1,391		2,059		2,416		2,727		4,853		6,235		7,014		8,469		10,305
Total Current Liabilities		7,337		5,485		6,992		9,280		10,499		9,634		9,218		14,092		14,757		13,751		16,661		19,282
Deferred Revenue - Non-Current		376		414		561		849		1,229		1,409		1,336		3,029		3,440		3,460		3,667		4,485
Other Non-Current Liabilities		520		551		690		686		1,507		1,375		1,533		1,421		1,681		1,715		1,924		2,252
Total Liabilities		8,233		6,450		8,243		10,815		13,235		12,418		12,087		18,542		19,878		18,926		22,252		26,019
Shareholders’ Equity:
Common Stock		4,594		4,848		5,149		5,368		6,046		6,342		6,831		7,177		7,392		7,643		7,957		8,210
Retained Earnings		6,611		7,381		8,199		9,101		10,684		11,642		12,714		13,845		15,448		16,653		17,878		19,538
Accumulated Other Comprehensive Income/(Loss)		23		32		56		63		74		69		77		8		69		15		53		84
Total Shareholders’ Equity		11,228		12,261		13,404		14,532		16,804		18,053		19,622		21,030		22,909		24,311		25,888		27,832
Total Liabilities and Shareholders’ Equity	$	19,461	$	18,711	$	21,647	$	25,347	$	30,039	$	30,471	$	31,709	$	39,572	$	42,787	$	43,237	$	48,140	$	53,851

Apple Inc.

Revised Quarterly Balance Sheet Information

($ in millions)

	Q1 2007			Q2 2007			Q3 2007			Q4 2007			Q1 2008			Q2 2008			Q3 2008			Q4 2008			Q1 2009			Q2 2009			Q3 2009			Q4 2009
Adjustments (a)
Current Assets:
Cash and Cash Equivalents	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-
Short-Term Marketable Securities		-			-			-			-			-			-			-			-			-			-			-			-
Accounts Receivable, Net		-			-			-			-			-			-			-			-			-			-			-			-
Inventories		-			-			-			-			-			-			-			-			-			-			-			-
Deferred Tax Assets		(1	)		(5	)		(16	)		6			(17	)		(68	)		(126	)		(403	)		(516	)		(474	)		(636	)		(966	)
Other Current Assets		(5	)		(26	)		(72	)		(261	)		(646	)		(895	)		(1,029	)		(1,902	)		(2,421	)		(2,381	)		(3,136	)		(3,744	)
Total Current Assets		(6	)		(31	)		(88	)		(255	)		(663	)		(963	)		(1,155	)		(2,305	)		(2,937	)		(2,855	)		(3,772	)		(4,710	)
Long-Term Marketable Securities		-			-			-			-			-			-			-			-			-			-			-			-
Property, Plant and Equipment, Net		-			-			-			-			-			-			-			-			-			-			-			-
Goodwill		-			-			-			-			-			-			-			-			-			-			-			-
Acquired Intangible Assets, Net		-			-			-			-			-			-			-			-			-			-			-			-
Other Assets		-			6			(56	)		(214	)		(470	)		(559	)		(431	)		(1,096	)		(1,230	)		(1,234	)		(1,367	)		(1,640	)
Total Assets	$	(6	)	$	(25	)	$	(144	)	$	(469	)	$	(1,133	)	$	(1,522	)	$	(1,586	)	$	(3,401	)	$	(4,167	)	$	(4,089	)	$	(5,139	)	$	(6,350	)
Current Liabilities:
Accounts Payable	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-
Accrued Expenses		(5	)		(44	)		(32	)		104			200			219			191			505			584			900			467			476
Deferred Revenue		(8	)		(30	)		(94	)		(278	)		(769	)		(1,090	)		(1,289	)		(3,236	)		(4,464	)		(5,272	)		(6,549	)		(8,252	)
Total Current Liabilities		(13	)		(74	)		(126	)		(174	)		(569	)		(871	)		(1,098	)		(2,731	)		(3,880	)		(4,372	)		(6,082	)		(7,776	)
Deferred Revenue - Non-Current		-			-			(89	)		(295	)		(626	)		(774	)		(671	)		(2,261	)		(2,626	)		(2,689	)		(2,879	)		(3,632	)
Other Non-Current Liabilities		-			38			38			1			4			9			10			324			498			729			946			1,250
Total Liabilities		(13	)		(36	)		(177	)		(468	)		(1,191	)		(1,636	)		(1,759	)		(4,668	)		(6,008	)		(6,332	)		(8,015	)		(10,158	)
Shareholders’ Equity:
Common Stock		-			-			-			-			-			-			-			-			-			-			-			-
Retained Earnings		7			11			33			(1	)		58			114			173			1,284			1,934			2,349			2,948			3,815
Accumulated Other Comprehensive Income/(Loss)		-			-			-			-			-			-			-			(17	)		(93	)		(106	)		(72	)		(7	)
Total Shareholders’ Equity		7			11			33			(1	)		58			114			173			1,267			1,841			2,243			2,876			3,808
Total Liabilities and Shareholders’ Equity	$	(6	)	$	(25	)	$	(144	)	$	(469	)	$	(1,133	)	$	(1,522	)	$	(1,586	)	$	(3,401	)	$	(4,167	)	$	(4,089	)	$	(5,139	)	$	(6,350	)

(a) In September 2009, the Financial Accounting Standards Board amended the accounting principles related to revenue recognition for arrangements with multiple deliverables and arrangements that include software elements. Apple adopted the new accounting principles on a retrospective basis during the first quarter of 2010. The new accounting principles significantly change how Apple accounts for certain revenue arrangements that include both hardware and software elements. The impact of the new accounting principles is reflected for all periods included in the above schedule. For additional information refer to the “Explanatory Note” in Apple’s Amendment No. 1 to its Annual Report on Form 10-K for the year ended September 26, 2009.

Apple Inc.

Revised Quarterly Cash Flow from Operations

($ in millions)

	Q1 2007			Q2 2007			Q3 2007			Q4 2007			FY 2007
New Accounting (a)
Cash Flow from Operations:
Net Income	$	1,011		$	774		$	840		$	870		$	3,495
Adjustments to Reconcile Net Income to Cash Generated by Operating Activities:
Depreciation, Amortization and Accretion		74			69			81			103			327
Stock-Based Compensation Expense		46			63			65			68			242
Deferred Income Tax Expense/(Benefit)		73			90			95			(185	)		73
Loss on Disposition of Property, Plant and Equipment		5			1			1			5			12
Changes in Operating Assets and Liabilities:
Accounts Receivable, Net		(369	)		693			(482	)		(227	)		(385	)
Inventories		(33	)		95			(43	)		(95	)		(76	)
Other Current Assets		41			574			(902	)		(992	)		(1,279	)
Other Assets		28			233			50			(26	)		285
Accounts Payable		495			(1,482	)		1,257			1,224			1,494
Deferred Revenue		191			14			135			226			566
Other Liabilities		251			(390	)		130			725			716
Cash Generated by Operating Activities	$	1,813		$	734		$	1,227		$	1,696		$	5,470
Old Accounting
Cash Flow from Operations:
Net Income	$	1,004		$	770		$	818		$	904		$	3,496
Adjustments to Reconcile Net Income to Cash Generated by Operating Activities:
Depreciation, Amortization and Accretion		74			69			81			93			317
Stock-Based Compensation Expense		46			63			65			68			242
Deferred Income Tax Expense/(Benefit)		73			49			84			(128	)		78
Loss on Disposition of Property, Plant and Equipment		5			1			1			5			12
Changes in Operating Assets and Liabilities:
Accounts Receivable, Net		(369	)		693			(482	)		(227	)		(385	)
Inventories		(33	)		95			(43	)		(95	)		(76	)
Other Current Assets		36			553			(952	)		(1,177	)		(1,540	)
Other Assets		28			233			(7	)		(173	)		81
Accounts Payable		495			(1,482	)		1,257			1,224			1,494
Deferred Revenue		199			36			288			616			1,139
Other Liabilities		255			(346	)		117			586			612
Cash Generated by Operating Activities	$	1,813		$	734		$	1,227		$	1,696		$	5,470
Adjustments (a)
Cash Flow from Operations:
Net Income	$	7		$	4		$	22		$	(34	)	$	(1	)
Adjustments to Reconcile Net Income to Cash Generated by Operating Activities:
Depreciation, Amortization and Accretion		-			-			-			10			10
Stock-Based Compensation Expense		-			-			-			-			-
Deferred Income Tax Expense/(Benefit)		-			41			11			(57	)		(5	)
Loss on Disposition of Property, Plant and Equipment		-			-			-			-			-
Changes in Operating Assets and Liabilities:
Accounts Receivable, Net		-			-			-			-			-
Inventories		-			-			-			-			-
Other Current Assets		5			21			50			185			261
Other Assets		-			-			57			147			204
Accounts Payable		-			-			-			-			-
Deferred Revenue		(8	)		(22	)		(153	)		(390	)		(573	)
Other Liabilities		(4	)		(44	)		13			139			104
Cash Generated by Operating Activities	$	-		$	-		$	-		$	-		$	-

(a) In September 2009, the Financial Accounting Standards Board amended the accounting principles related to revenue recognition for arrangements with multiple deliverables and arrangements that include software elements. Apple adopted the new accounting principles on a retrospective basis during the first quarter of 2010. The new accounting principles significantly change how Apple accounts for certain revenue arrangements that include both hardware and software elements. The impact of the new accounting principles is reflected for all periods included in the above schedule. For additional information refer to the "Explanatory Note" in Apple's Amendment No. 1 to its Annual Report on Form 10-K for the year ended September 26, 2009.

Apple Inc.

Revised Quarterly Cash Flow from Operations

($ in millions)

	Q1 2008			Q2 2008			Q3 2008			Q4 2008			FY 2008
New Accounting (a)
Cash Flow from Operations:
Net Income	$	1,640		$	1,101		$	1,131		$	2,247		$	6,119
Adjustments to Reconcile Net Income to Cash Generated by Operating Activities:
Depreciation, Amortization and Accretion		110			120			120			146			496
Stock-Based Compensation Expense		110			132			133			141			516
Deferred Income Tax Expense/(Benefit)		49			39			95			215			398
Loss/(Gain) on Disposition of Property, Plant and Equipment		14			(4	)		5			7			22
Changes in Operating Assets and Liabilities:
Accounts Receivable, Net		(302	)		346			(10	)		(819	)		(785	)
Inventories		(113	)		95			(181	)		36			(163	)
Other Current Assets		(154	)		360			477			(957	)		(274	)
Other Assets		(13	)		183			121			(2	)		289
Accounts Payable		484			(1,224	)		(486	)		1,822			596
Deferred Revenue		226			68			142			282			718
Other Liabilities		736			(23	)		(226	)		1,177			1,664
Cash Generated by Operating Activities	$	2,787		$	1,193		$	1,321		$	4,295		$	9,596
Old Accounting
Cash Flow from Operations:
Net Income	$	1,581		$	1,045		$	1,072		$	1,136		$	4,834
Adjustments to Reconcile Net Income to Cash Generated by Operating Activities:
Depreciation, Amortization and Accretion		106			116			117			134			473
Stock-Based Compensation Expense		110			132			133			141			516
Deferred Income Tax Expense/(Benefit)		22			(16	)		35			(409	)		(368	)
Loss/(Gain) on Disposition of Property, Plant and Equipment		14			(4	)		5			7			22
Changes in Operating Assets and Liabilities:
Accounts Receivable, Net		(302	)		346			(10	)		(819	)		(785	)
Inventories		(113	)		95			(181	)		36			(163	)
Other Current Assets		(550	)		106			344			(1,858	)		(1,958	)
Other Assets		(253	)		103			251			(593	)		(492	)
Accounts Payable		484			(1,224	)		(486	)		1,822			596
Deferred Revenue		1,048			537			238			3,819			5,642
Other Liabilities		640			(43	)		(197	)		879			1,279
Cash Generated by Operating Activities	$	2,787		$	1,193		$	1,321		$	4,295		$	9,596
Adjustments (a)
Cash Flow from Operations:
Net Income	$	59		$	56		$	59		$	1,111		$	1,285
Adjustments to Reconcile Net Income to Cash Generated by Operating Activities:
Depreciation, Amortization and Accretion		4			4			3			12			23
Stock-Based Compensation Expense		-			-			-			-			-
Deferred Income Tax Expense/(Benefit)		27			55			60			624			766
Loss/(Gain) on Disposition of Property, Plant and Equipment		-			-			-			-			-
Changes in Operating Assets and Liabilities:
Accounts Receivable, Net		-			-			-			-			-
Inventories		-			-			-			-			-
Other Current Assets		396			254			133			901			1,684
Other Assets		240			80			(130	)		591			781
Accounts Payable		-			-			-			-			-
Deferred Revenue		(822	)		(469	)		(96	)		(3,537	)		(4,924	)
Other Liabilities		96			20			(29	)		298			385
Cash Generated by Operating Activities	$	-		$	-		$	-		$	-		$	-

(a) In September 2009, the Financial Accounting Standards Board amended the accounting principles related to revenue recognition for arrangements with multiple deliverables and arrangements that include software elements. Apple adopted the new accounting principles on a retrospective basis during the first quarter of 2010. The new accounting principles significantly change how Apple accounts for certain revenue arrangements that include both hardware and software elements. The impact of the new accounting principles is reflected for all periods included in the above schedule. For additional information refer to the "Explanatory Note" in Apple's Amendment No. 1 to its Annual Report on Form 10-K for the year ended September 26, 2009.

Apple Inc.

Revised Quarterly Cash Flow from Operations

($ in millions)

	Q1 2009			Q2 2009			Q3 2009			Q4 2009			FY 2009
New Accounting (a)
Cash Flow from Operations:
Net Income	$	2,255		$	1,620		$	1,828		$	2,532		$	8,235
Adjustments to Reconcile Net Income to Cash Generated by Operating Activities:
Depreciation, Amortization and Accretion		168			181			182			203			734
Stock-Based Compensation Expense		170			181			179			180			710
Deferred Income Tax Expense/(Benefit)		276			294			202			268			1,040
Loss on Disposition of Property, Plant and Equipment		7			1			10			8			26
Changes in Operating Assets and Liabilities:
Accounts Receivable, Net		226			264			(754	)		(675	)		(939	)
Inventories		113			84			(68	)		(75	)		54
Other Current Assets		1,097			137			(384	)		(101	)		749
Other Assets		7			(368	)		(241	)		(300	)		(902	)
Accounts Payable		(767	)		(760	)		879			740			92
Deferred Revenue		200			(72	)		195			198			521
Other Liabilities		186			(721	)		242			132			(161	)
Cash Generated by Operating Activities	$	3,938		$	841		$	2,270		$	3,110		$	10,159
Old Accounting
Cash Flow from Operations:
Net Income	$	1,605		$	1,205		$	1,229		$	1,665		$	5,704
Adjustments to Reconcile Net Income to Cash Generated by Operating Activities:
Depreciation, Amortization and Accretion		158			172			176			197			703
Stock-Based Compensation Expense		170			181			179			180			710
Deferred Income Tax Expense/(Benefit)		(27	)		(4	)		(170	)		(318	)		(519	)
Loss on Disposition of Property, Plant and Equipment		7			1			10			8			26
Changes in Operating Assets and Liabilities:
Accounts Receivable, Net		226			264			(754	)		(675	)		(939	)
Inventories		113			84			(68	)		(75	)		54
Other Current Assets		660			199			(1,157	)		(752	)		(1,050	)
Other Assets		(116	)		(340	)		(360	)		(530	)		(1,346	)
Accounts Payable		(767	)		(760	)		879			740			92
Deferred Revenue		1,793			799			1,662			2,654			6,908
Other Liabilities		116			(960	)		644			16			(184	)
Cash Generated by Operating Activities	$	3,938		$	841		$	2,270		$	3,110		$	10,159
Adjustments (a)
Cash Flow from Operations:
Net Income	$	650		$	415		$	599		$	867		$	2,531
Adjustments to Reconcile Net Income to Cash Generated by Operating Activities:
Depreciation, Amortization and Accretion		10			9			6			6			31
Stock-Based Compensation Expense		-			-			-			-			-
Deferred Income Tax Expense/(Benefit)		303			298			372			586			1,559
Loss on Disposition of Property, Plant and Equipment		-			-			-			-			-
Changes in Operating Assets and Liabilities:
Accounts Receivable, Net		-			-			-			-			-
Inventories		-			-			-			-			-
Other Current Assets		437			(62	)		773			651			1,799
Other Assets		123			(28	)		119			230			444
Accounts Payable		-			-			-			-			-
Deferred Revenue		(1,593	)		(871	)		(1,467	)		(2,456	)		(6,387	)
Other Liabilities		70			239			(402	)		116			23
Cash Generated by Operating Activities	$	-		$	-		$	-		$	-		$	-

(a) In September 2009, the Financial Accounting Standards Board amended the accounting principles related to revenue recognition for arrangements with multiple deliverables and arrangements that include software elements. Apple adopted the new accounting principles on a retrospective basis during the first quarter of 2010. The new accounting principles significantly change how Apple accounts for certain revenue arrangements that include both hardware and software elements. The impact of the new accounting principles is reflected for all periods included in the above schedule. For additional information refer to the "Explanatory Note" in Apple's Amendment No. 1 to its Annual Report on Form 10-K for the year ended September 26, 2009.

Apple Inc.

Revised Quarterly Summary Data

($ in millions, units in thousands)

	Q1 2007		Q2 2007		Q3 2007		Q4 2007			FY 2007
iPhone Unit Sales		-		-		270		1,119			1,389
New Accounting (a)
Operating Segments
Americas	$	3,528	$	2,480	$	2,743	$	3,156		$	11,907
Europe		1,712		1,252		1,166		1,339			5,469
Japan		285		285		259		255			1,084
Retail		1,116		837		998		1,411			4,362
Other Segments		482		432		397		445			1,756
Total Operating Segments Revenue	$	7,123	$	5,286	$	5,563	$	6,606		$	24,578
Product Summary
Desktops	$	955	$	914	$	956	$	1,198		$	4,023
Portables		1,462		1,357		1,577		1,917			6,313
Subtotal CPUs		2,417		2,271		2,533		3,115			10,336
iPod		3,427		1,689		1,570		1,619			8,305
Other Music Related Products and Services		634		653		608		601			2,496
iPhone and Related Products and Services		-		-		141		489			630
Peripherals and Other Hardware		297		328		325		353			1,303
Software, Service, and Other Sales		348		345		386		429			1,508
		4,706		3,015		3,030		3,491			14,242
Total Apple Revenue	$	7,123	$	5,286	$	5,563	$	6,606		$	24,578
Old Accounting
Operating Segments
Americas	$	3,521	$	2,467	$	2,680	$	2,928		$	11,596
Europe		1,712		1,249		1,160		1,339			5,460
Japan		285		284		258		255			1,082
Retail		1,115		834		915		1,251			4,115
Other Segments		482		430		397		444			1,753
Total Operating Segments Revenue	$	7,115	$	5,264	$	5,410	$	6,217		$	24,006
Product Summary
Desktops	$	955	$	914	$	956	$	1,195		$	4,020
Portables		1,455		1,354		1,577		1,908			6,294
Subtotal CPUs		2,410		2,268		2,533		3,103			10,314
iPod		3,427		1,689		1,570		1,619			8,305
Other Music Related Products and Services		634		653		608		601			2,496
iPhone and Related Products and Services		-		-		5		118			123
Peripherals and Other Hardware		297		309		308		346			1,260
Software, Service, and Other Sales		347		345		386		430			1,508
		4,705		2,996		2,877		3,114			13,692
Total Apple Revenue	$	7,115	$	5,264	$	5,410	$	6,217		$	24,006
Adjustments (a)
Operating Segments
Americas	$	7	$	13	$	63	$	228		$	311
Europe		-		3		6		-			9
Japan		-		1		1		-			2
Retail		1		3		83		160			247
Other Segments		-		2		-		1			3
Total Operating Segments Revenue	$	8	$	22	$	153	$	389		$	572
Product Summary
Desktops	$	-	$	-	$	-	$	3		$	3
Portables		7		3		-		9			19
Subtotal CPUs		7		3		-		12			22
iPod		-		-		-		-			-
Other Music Related Products and Services		-		-		-		-			-
iPhone and Related Products and Services		-		-		136		371			507
Peripherals and Other Hardware		-		19		17		7			43
Software, Service, and Other Sales		1		-		-		(1	)		-
		1		19		153		377			550
Total Apple Revenue	$	8	$	22	$	153	$	389		$	572

(a) In September 2009, the Financial Accounting Standards Board amended the accounting principles related to revenue recognition for arrangements with multiple deliverables and arrangements that include software elements. Apple adopted the new accounting principles on a retrospective basis during the first quarter of 2010. The new accounting principles significantly change how Apple accounts for certain revenue arrangements that include both hardware and software elements. The impact of the new accounting principles is reflected for all periods included in the above schedule. For additional information refer to the "Explanatory Note" in Apple's Amendment No. 1 to its Annual Report on Form 10-K for the year ended September 26, 2009.

Apple Inc.

Revised Quarterly Summary Data

($ in millions, units in thousands)

	Q1 2008			Q2 2008		Q3 2008			Q4 2008		FY 2008
iPhone Unit Sales		2,315			1,703		717			6,892		11,627
New Accounting (a)
Operating Segments
Americas	$	4,635		$	3,463	$	3,538		$	4,811	$	16,447
Europe		2,651			1,784		1,630			3,168		9,233
Japan		400			424		365			539		1,728
Retail		2,007			1,720		1,454			2,111		7,292
Other Segments		737			589		574			891		2,791
Total Operating Segments Revenue	$	10,430		$	7,980	$	7,561		$	11,520	$	37,491
Product Summary
Desktops	$	1,516		$	1,355	$	1,383		$	1,368	$	5,622
Portables		2,054			2,156		2,251			2,271		8,732
Subtotal CPUs		3,570			3,511		3,634			3,639		14,354
iPod		3,997			1,818		1,678			1,660		9,153
Other Music Related Products and Services		808			881		819			832		3,340
iPhone and Related Products and Services		1,036			817		483			4,406		6,742
Peripherals and Other Hardware		391			424		446			433		1,694
Software, Service, and Other Sales		628			529		501			550		2,208
		6,860			4,469		3,927			7,881		23,137
Total Apple Revenue	$	10,430		$	7,980	$	7,561		$	11,520	$	37,491
Old Accounting
Operating Segments
Americas	$	4,298		$	3,268	$	3,435		$	3,572	$	14,573
Europe		2,471			1,780		1,648			1,723		7,622
Japan		400			424		365			320		1,509
Retail		1,701			1,451		1,445			1,718		6,315
Other Segments		738			589		571			562		2,460
Total Operating Segments Revenue	$	9,608		$	7,512	$	7,464		$	7,895	$	32,479
Product Summary
Desktops	$	1,515		$	1,352	$	1,373		$	1,363	$	5,603
Portables		2,037			2,142		2,237			2,257		8,673
Subtotal CPUs		3,552			3,494		3,610			3,620		14,276
iPod		3,997			1,818		1,678			1,660		9,153
Other Music Related Products and Services		808			881		819			832		3,340
iPhone and Related Products and Services		241			378		419			806		1,844
Peripherals and Other Hardware		382			412		437			428		1,659
Software, Service, and Other Sales		628			529		501			549		2,207
		6,056			4,018		3,854			4,275		18,203
Total Apple Revenue	$	9,608		$	7,512	$	7,464		$	7,895	$	32,479
Adjustments (a)
Operating Segments
Americas	$	337		$	195	$	103		$	1,239	$	1,874
Europe		180			4		(18	)		1,445		1,611
Japan		-			-		-			219		219
Retail		306			269		9			393		977
Other Segments		(1	)		-		3			329		331
Total Operating Segments Revenue	$	822		$	468	$	97		$	3,625	$	5,012
Product Summary
Desktops	$	1		$	3	$	10		$	5	$	19
Portables		17			14		14			14		59
Subtotal CPUs		18			17		24			19		78
iPod		-			-		-			-		-
Other Music Related Products and Services		-			-		-			-		-
iPhone and Related Products and Services		795			439		64			3,600		4,898
Peripherals and Other Hardware		9			12		9			5		35
Software, Service, and Other Sales		-			-		-			1		1
		804			451		73			3,606		4,934
Total Apple Revenue	$	822		$	468	$	97		$	3,625	$	5,012

(a) In September 2009, the Financial Accounting Standards Board amended the accounting principles related to revenue recognition for arrangements with multiple deliverables and arrangements that include software elements. Apple adopted the new accounting principles on a retrospective basis during the first quarter of 2010. The new accounting principles significantly change how Apple accounts for certain revenue arrangements that include both hardware and software elements. The impact of the new accounting principles is reflected for all periods included in the above schedule. For additional information refer to the "Explanatory Note" in Apple's Amendment No. 1 to its Annual Report on Form 10-K for the year ended September 26, 2009.

Apple Inc.

Revised Quarterly Summary Data

($ in millions, units in thousands)

	Q1 2009		Q2 2009			Q3 2009			Q4 2009			FY 2009
iPhone Unit Sales		4,363		3,793			5,208			7,367			20,731
New Accounting (a)
Operating Segments
Americas	$	5,278	$	3,942		$	4,452		$	5,215		$	18,887
Europe		3,585		2,485			2,505			3,235			11,810
Japan		498		587			560			634			2,279
Retail		1,746		1,377			1,492			2,041			6,656
Other Segments		773		693			725			1,082			3,273
Total Operating Segments Revenue	$	11,880	$	9,084		$	9,734		$	12,207		$	42,905
Product Summary
Desktops	$	1,045	$	1,056		$	1,134		$	1,089		$	4,324
Portables		2,520		1,904			2,220			2,891			9,535
Subtotal CPUs		3,565		2,960			3,354			3,980			13,859
iPod		3,371		1,665			1,492			1,563			8,091
Other Music Related Products and Services		1,011		1,049			958			1,018			4,036
iPhone and Related Products and Services		2,940		2,427			3,060			4,606			13,033
Peripherals and Other Hardware		387		357			340			391			1,475
Software, Service, and Other Sales		606		626			530			649			2,411
		8,315		6,124			6,380			8,227			29,046
Total Apple Revenue	$	11,880	$	9,084		$	9,734		$	12,207		$	42,905
Old Accounting
Operating Segments
Americas	$	4,501	$	3,517		$	3,827		$	4,297		$	16,142
Europe		2,771		2,097			2,006			2,491			9,365
Japan		481		500			416			434			1,831
Retail		1,740		1,471			1,496			1,867			6,574
Other Segments		674		578			592			781			2,625
Total Operating Segments Revenue	$	10,167	$	8,163		$	8,337		$	9,870		$	36,537
Product Summary
Desktops	$	1,043	$	1,050		$	1,129		$	1,086		$	4,308
Portables		2,511		1,895			2,200			2,866			9,472
Subtotal CPUs		3,554		2,945			3,329			3,952			13,780
iPod		3,371		1,665			1,492			1,563			8,091
Other Music Related Products and Services		1,011		1,049			958			1,018			4,036
iPhone and Related Products and Services		1,247		1,521			1,689			2,297			6,754
Peripherals and Other Hardware		378		358			341			393			1,470
Software, Service, and Other Sales		606		625			528			647			2,406
		6,613		5,218			5,008			5,918			22,757
Total Apple Revenue	$	10,167	$	8,163		$	8,337		$	9,870		$	36,537
Adjustments (a)
Operating Segments
Americas	$	777	$	425		$	625		$	918		$	2,745
Europe		814		388			499			744			2,445
Japan		17		87			144			200			448
Retail		6		(94	)		(4	)		174			82
Other Segments		99		115			133			301			648
Total Operating Segments Revenue	$	1,713	$	921		$	1,397		$	2,337		$	6,368
Product Summary
Desktops	$	2	$	6		$	5		$	3		$	16
Portables		9		9			20			25			63
Subtotal CPUs		11		15			25			28			79
iPod		-		-			-			-			-
Other Music Related Products and Services		-		-			-			-			-
iPhone and Related Products and Services		1,693		906			1,371			2,309			6,279
Peripherals and Other Hardware		9		(1	)		(1	)		(2	)		5
Software, Service, and Other Sales		-		1			2			2			5
		1,702		906			1,372			2,309			6,289
Total Apple Revenue	$	1,713	$	921		$	1,397		$	2,337		$	6,368

(a) In September 2009, the Financial Accounting Standards Board amended the accounting principles related to revenue recognition for arrangements with multiple deliverables and arrangements that include software elements. Apple adopted the new accounting principles on a retrospective basis during the first quarter of 2010. The new accounting principles significantly change how Apple accounts for certain revenue arrangements that include both hardware and software elements. The impact of the new accounting principles is reflected for all periods included in the above schedule. For additional information refer to the "Explanatory Note" in Apple's Amendment No. 1 to its Annual Report on Form 10-K for the year ended September 26, 2009.

Apple Inc.

Revised Quarterly Deferred Revenue Information

($ in millions)

	Q3 2007			Q4 2007
New Accounting (a)
Deferred Revenue - Current:
iPhone and Apple TV	$	4		$	72
AppleCare		399			430
Other		566			611
Total Deferred Revenue - Current		969			1,113
Deferred Revenue - Non-Current:
iPhone and Apple TV		4			14
AppleCare		435			495
Other		33			45
Total Deferred Revenue - Non-Current		472			554
Total Deferred Revenue	$	1,441		$	1,667
Old Accounting
Deferred Revenue - Current:
iPhone and Apple TV	$	92		$	346
AppleCare		399			430
Other		572			615
Total Deferred Revenue - Current		1,063			1,391
Deferred Revenue - Non-Current:
iPhone and Apple TV		88			290
AppleCare		435			495
Other		38			64
Total Deferred Revenue - Non-Current		561			849
Total Deferred Revenue	$	1,624		$	2,240
Adjustments (a)
Deferred Revenue - Current:
iPhone and Apple TV	$	(88	)	$	(274	)
AppleCare		-			-
Other		(6	)		(4	)
Total Deferred Revenue - Current		(94	)		(278	)
Deferred Revenue - Non-Current:
iPhone and Apple TV		(84	)		(276	)
AppleCare		-			-
Other		(5	)		(19	)
Total Deferred Revenue - Non-Current		(89	)		(295	)
Total Deferred Revenue	$	(183	)	$	(573	)

(a) In September 2009, the Financial Accounting Standards Board amended the accounting principles related to revenue recognition for arrangements with multiple deliverables and arrangements that include software elements. Apple adopted the new accounting principles on a retrospective basis during the first quarter of 2010. The new accounting principles significantly change how Apple accounts for certain revenue arrangements that include both hardware and software elements. The impact of the new accounting principles is reflected for all periods included in the above schedule. For additional information refer to the "Explanatory Note" in Apple's Amendment No. 1 to its Annual Report on Form 10-K for the year ended September 26, 2009.

Apple Inc.

Revised Quarterly Deferred Revenue Information

($ in millions)

	Q1 2008			Q2 2008			Q3 2008			Q4 2008
New Accounting (a)
Deferred Revenue - Current:
iPhone and Apple TV	$	58		$	94		$	122		$	330
AppleCare		467			504			547			591
Other		765			728			769			696
Total Deferred Revenue - Current		1,290			1,326			1,438			1,617
Deferred Revenue - Non-Current:
iPhone and Apple TV		34			41			32			86
AppleCare		529			559			597			642
Other		40			35			36			40
Total Deferred Revenue - Non-Current		603			635			665			768
Total Deferred Revenue	$	1,893		$	1,961		$	2,103		$	2,385
Old Accounting
Deferred Revenue - Current:
iPhone and Apple TV	$	816		$	1,170		$	1,389		$	3,518
AppleCare		467			504			547			599
Other		776			742			791			736
Total Deferred Revenue - Current		2,059			2,416			2,727			4,853
Deferred Revenue - Non-Current:
iPhone and Apple TV		624			763			632			2,262
AppleCare		529			559			597			651
Other		76			87			107			116
Total Deferred Revenue - Non-Current		1,229			1,409			1,336			3,029
Total Deferred Revenue	$	3,288		$	3,825		$	4,063		$	7,882
Adjustments (a)
Deferred Revenue - Current:
iPhone and Apple TV	$	(758	)	$	(1,076	)	$	(1,267	)	$	(3,188	)
AppleCare		-			-			-			(8	)
Other		(11	)		(14	)		(22	)		(40	)
Total Deferred Revenue - Current		(769	)		(1,090	)		(1,289	)		(3,236	)
Deferred Revenue - Non-Current:
iPhone and Apple TV		(590	)		(722	)		(600	)		(2,176	)
AppleCare		-			-			-			(9	)
Other		(36	)		(52	)		(71	)		(76	)
Total Deferred Revenue - Non-Current		(626	)		(774	)		(671	)		(2,261	)
Total Deferred Revenue	$	(1,395	)	$	(1,864	)	$	(1,960	)	$	(5,497	)

(a) In September 2009, the Financial Accounting Standards Board amended the accounting principles related to revenue recognition for arrangements with multiple deliverables and arrangements that include software elements. Apple adopted the new accounting principles on a retrospective basis during the first quarter of 2010. The new accounting principles significantly change how Apple accounts for certain revenue arrangements that include both hardware and software elements. The impact of the new accounting principles is reflected for all periods included in the above schedule. For additional information refer to the "Explanatory Note" in Apple's Amendment No. 1 to its Annual Report on Form 10-K for the year ended September 26, 2009.

Apple Inc.

Revised Quarterly Deferred Revenue Information

($ in millions)

	Q1 2009			Q2 2009			Q3 2009			Q4 2009
New Accounting (a)
Deferred Revenue - Current:
iPhone and Apple TV	$	247		$	239		$	284		$	346
AppleCare		594			651			713			779
Other		930			852			923			928
Total Deferred Revenue - Current		1,771			1,742			1,920			2,053
Deferred Revenue - Non-Current:
iPhone and Apple TV		102			102			110			137
AppleCare		673			631			643			677
Other		39			38			35			39
Total Deferred Revenue - Non-Current		814			771			788			853
Total Deferred Revenue	$	2,585		$	2,513		$	2,708		$	2,906
Old Accounting
Deferred Revenue - Current:
iPhone and Apple TV	$	4,666		$	5,467		$	6,767		$	8,519
AppleCare		602			659			725			791
Other		967			888			977			995
Total Deferred Revenue - Current		6,235			7,014			8,469			10,305
Deferred Revenue - Non-Current:
iPhone and Apple TV		2,627			2,676			2,860			3,618
AppleCare		683			638			653			688
Other		130			146			154			179
Total Deferred Revenue - Non-Current		3,440			3,460			3,667			4,485
Total Deferred Revenue	$	9,675		$	10,474		$	12,136		$	14,790
Adjustments (a)
Deferred Revenue - Current:
iPhone and Apple TV	$	(4,419	)	$	(5,228	)	$	(6,483	)	$	(8,173	)
AppleCare		(8	)		(8	)		(12	)		(12	)
Other		(37	)		(36	)		(54	)		(67	)
Total Deferred Revenue - Current		(4,464	)		(5,272	)		(6,549	)		(8,252	)
Deferred Revenue - Non-Current:
iPhone and Apple TV		(2,525	)		(2,574	)		(2,750	)		(3,481	)
AppleCare		(10	)		(7	)		(10	)		(11	)
Other		(91	)		(108	)		(119	)		(140	)
Total Deferred Revenue - Non-Current		(2,626	)		(2,689	)		(2,879	)		(3,632	)
Total Deferred Revenue	$	(7,090	)	$	(7,961	)	$	(9,428	)	$	(11,884	)

(a) In September 2009, the Financial Accounting Standards Board amended the accounting principles related to revenue recognition for arrangements with multiple deliverables and arrangements that include software elements. Apple adopted the new accounting principles on a retrospective basis during the first quarter of 2010. The new accounting principles significantly change how Apple accounts for certain revenue arrangements that include both hardware and software elements. The impact of the new accounting principles is reflected for all periods included in the above schedule. For additional information refer to the "Explanatory Note" in Apple's Amendment No. 1 to its Annual Report on Form 10-K for the year ended September 26, 2009.