California | 001-36743 | 94-2404110 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS. Employer Identification No.) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
Item 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits. |
Exhibit Number | Exhibit Description | |
99.1 | Press release issued by Apple Inc. on July 26, 2016. | |
99.2 | Data sheet issued by Apple Inc. on July 26, 2016. |
Date: July 26, 2016 | Apple Inc. | |||
By: | /s/ Luca Maestri | |||
Luca Maestri Senior Vice President, Chief Financial Officer |
Exhibit Number | Exhibit Description | |
99.1 | Press release issued by Apple Inc. on July 26, 2016. | |
99.2 | Data sheet issued by Apple Inc. on July 26, 2016. |
• | revenue between $45.5 billion and $47.5 billion |
• | gross margin between 37.5 percent and 38 percent |
• | operating expenses between $6.05 billion and $6.15 billion |
• | other income/(expense) of $350 million |
• | tax rate of 25.5 percent |
Three Months Ended | Nine Months Ended | ||||||||||||||
June 25, 2016 | June 27, 2015 | June 25, 2016 | June 27, 2015 | ||||||||||||
Net sales | $ | 42,358 | $ | 49,605 | $ | 168,787 | $ | 182,214 | |||||||
Cost of sales (1) | 26,252 | 29,924 | 102,337 | 109,136 | |||||||||||
Gross margin | 16,106 | 19,681 | 66,450 | 73,078 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development (1) | 2,560 | 2,034 | 7,475 | 5,847 | |||||||||||
Selling, general and administrative (1) | 3,441 | 3,564 | 10,712 | 10,624 | |||||||||||
Total operating expenses | 6,001 | 5,598 | 18,187 | 16,471 | |||||||||||
Operating income | 10,105 | 14,083 | 48,263 | 56,607 | |||||||||||
Other income/(expense), net | 364 | 390 | 921 | 846 | |||||||||||
Income before provision for income taxes | 10,469 | 14,473 | 49,184 | 57,453 | |||||||||||
Provision for income taxes | 2,673 | 3,796 | 12,511 | 15,183 | |||||||||||
Net income | $ | 7,796 | $ | 10,677 | $ | 36,673 | $ | 42,270 | |||||||
Earnings per share: | |||||||||||||||
Basic | $ | 1.43 | $ | 1.86 | $ | 6.66 | $ | 7.30 | |||||||
Diluted | $ | 1.42 | $ | 1.85 | $ | 6.62 | $ | 7.25 | |||||||
Shares used in computing earnings per share: | |||||||||||||||
Basic | 5,443,058 | 5,729,886 | 5,505,456 | 5,788,922 | |||||||||||
Diluted | 5,472,781 | 5,773,099 | 5,535,931 | 5,829,920 | |||||||||||
Cash dividends declared per share | $ | 0.57 | $ | 0.52 | $ | 1.61 | $ | 1.46 | |||||||
(1) Includes share-based compensation expense as follows: | |||||||||||||||
Cost of sales | $ | 188 | $ | 148 | $ | 583 | $ | 430 | |||||||
Research and development | $ | 479 | $ | 388 | $ | 1,413 | $ | 1,146 | |||||||
Selling, general and administrative | $ | 387 | $ | 320 | $ | 1,184 | $ | 1,095 |
June 25, 2016 | September 26, 2015 | ||||||
ASSETS: | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 18,237 | $ | 21,120 | |||
Short-term marketable securities | 43,519 | 20,481 | |||||
Accounts receivable, less allowances of $55 and $63, respectively | 11,714 | 16,849 | |||||
Inventories | 1,831 | 2,349 | |||||
Vendor non-trade receivables | 7,328 | 13,494 | |||||
Other current assets | 11,132 | 15,085 | |||||
Total current assets | 93,761 | 89,378 | |||||
Long-term marketable securities | 169,764 | 164,065 | |||||
Property, plant and equipment, net | 25,448 | 22,471 | |||||
Goodwill | 5,261 | 5,116 | |||||
Acquired intangible assets, net | 3,506 | 3,893 | |||||
Other non-current assets | 7,862 | 5,556 | |||||
Total assets | $ | 305,602 | $ | 290,479 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY: | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 26,318 | $ | 35,490 | |||
Accrued expenses | 20,820 | 25,181 | |||||
Deferred revenue | 8,352 | 8,940 | |||||
Commercial paper | 12,496 | 8,499 | |||||
Current portion of long-term debt | 3,500 | 2,500 | |||||
Total current liabilities | 71,486 | 80,610 | |||||
Deferred revenue, non-current | 3,064 | 3,624 | |||||
Long-term debt | 68,939 | 53,463 | |||||
Other non-current liabilities | 35,572 | 33,427 | |||||
Total liabilities | 179,061 | 171,124 | |||||
Commitments and contingencies | |||||||
Shareholders’ equity: | |||||||
Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 5,393,165 and 5,578,753 shares issued and outstanding, respectively | 30,106 | 27,416 | |||||
Retained earnings | 96,542 | 92,284 | |||||
Accumulated other comprehensive income/(loss) | (107 | ) | (345 | ) | |||
Total shareholders’ equity | 126,541 | 119,355 | |||||
Total liabilities and shareholders’ equity | $ | 305,602 | $ | 290,479 |
Nine Months Ended | |||||||
June 25, 2016 | June 27, 2015 | ||||||
Cash and cash equivalents, beginning of the period | $ | 21,120 | $ | 13,844 | |||
Operating activities: | |||||||
Net income | 36,673 | 42,270 | |||||
Adjustments to reconcile net income to cash generated by operating activities: | |||||||
Depreciation and amortization | 7,957 | 8,138 | |||||
Share-based compensation expense | 3,180 | 2,671 | |||||
Deferred income tax expense | 5,191 | 2,820 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable, net | 5,135 | 7,090 | |||||
Inventories | 518 | 69 | |||||
Vendor non-trade receivables | 6,166 | 222 | |||||
Other current and non-current assets | 1,143 | 2,286 | |||||
Accounts payable | (9,622 | ) | (3,263 | ) | |||
Deferred revenue | (1,148 | ) | 1,040 | ||||
Other current and non-current liabilities | (5,495 | ) | 4,448 | ||||
Cash generated by operating activities | 49,698 | 67,791 | |||||
Investing activities: | |||||||
Purchases of marketable securities | (112,068 | ) | (137,524 | ) | |||
Proceeds from maturities of marketable securities | 14,915 | 9,916 | |||||
Proceeds from sales of marketable securities | 69,926 | 80,635 | |||||
Payments made in connection with business acquisitions, net | (146 | ) | (230 | ) | |||
Payments for acquisition of property, plant and equipment | (8,757 | ) | (7,629 | ) | |||
Payments for acquisition of intangible assets | (753 | ) | (201 | ) | |||
Payments for strategic investments | (1,376 | ) | — | ||||
Other | (321 | ) | 134 | ||||
Cash used in investing activities | (38,580 | ) | (54,899 | ) | |||
Financing activities: | |||||||
Proceeds from issuance of common stock | 247 | 324 | |||||
Excess tax benefits from equity awards | 391 | 684 | |||||
Payments for taxes related to net share settlement of equity awards | (1,361 | ) | (1,332 | ) | |||
Payments for dividends and dividend equivalents | (9,058 | ) | (8,597 | ) | |||
Repurchases of common stock | (23,696 | ) | (22,000 | ) | |||
Proceeds from issuance of term debt, net | 17,984 | 21,312 | |||||
Repayments of term debt | (2,500 | ) | — | ||||
Change in commercial paper, net | 3,992 | (1,808 | ) | ||||
Cash used in financing activities | (14,001 | ) | (11,417 | ) | |||
Increase/(decrease) in cash and cash equivalents | (2,883 | ) | 1,475 | ||||
Cash and cash equivalents, end of the period | $ | 18,237 | $ | 15,319 | |||
Supplemental cash flow disclosure: | |||||||
Cash paid for income taxes, net | $ | 8,990 | $ | 10,604 | |||
Cash paid for interest | $ | 892 | $ | 427 |
Exhibit 99.2 | |||||||||||||||||||||||||||||||||||
Apple Inc. | |||||||||||||||||||||||||||||||||||
Q3 2016 Unaudited Summary Data | |||||||||||||||||||||||||||||||||||
(Units in thousands, Revenue in millions) | |||||||||||||||||||||||||||||||||||
Q3 2016 | Q2 2016 | Q3 2015 | Sequential Change | Year/Year Change | |||||||||||||||||||||||||||||||
Revenue | Revenue | Revenue | Revenue | Revenue | |||||||||||||||||||||||||||||||
Operating Segments | |||||||||||||||||||||||||||||||||||
Americas | $ | 17,963 | $ | 19,096 | $ | 20,209 | -6 | % | -11 | % | |||||||||||||||||||||||||
Europe | 9,643 | 11,535 | 10,342 | -16 | % | -7 | % | ||||||||||||||||||||||||||||
Greater China | 8,848 | 12,486 | 13,230 | -29 | % | -33 | % | ||||||||||||||||||||||||||||
Japan | 3,529 | 4,281 | 2,872 | -18 | % | 23 | % | ||||||||||||||||||||||||||||
Rest of Asia Pacific | 2,375 | 3,159 | 2,952 | -25 | % | -20 | % | ||||||||||||||||||||||||||||
Total Apple | $ | 42,358 | $ | 50,557 | $ | 49,605 | -16 | % | -15 | % | |||||||||||||||||||||||||
Q3 2016 | Q2 2016 | Q3 2015 | Sequential Change | Year/Year Change | |||||||||||||||||||||||||||||||
Units | Revenue | Units | Revenue | Units | Revenue | Units | Revenue | Units | Revenue | ||||||||||||||||||||||||||
Product Summary | |||||||||||||||||||||||||||||||||||
iPhone (1) | 40,399 | $ | 24,048 | 51,193 | $ | 32,857 | 47,534 | $ | 31,368 | -21 | % | -27 | % | -15 | % | -23 | % | ||||||||||||||||||
iPad (1) | 9,950 | 4,876 | 10,251 | 4,413 | 10,931 | 4,538 | -3 | % | 10 | % | -9 | % | 7 | % | |||||||||||||||||||||
Mac (1) | 4,252 | 5,239 | 4,034 | 5,107 | 4,796 | 6,030 | 5 | % | 3 | % | -11 | % | -13 | % | |||||||||||||||||||||
Services (2) | 5,976 | 5,991 | 5,028 | 0 | % | 19 | % | ||||||||||||||||||||||||||||
Other Products (1)(3) | 2,219 | 2,189 | 2,641 | 1 | % | -16 | % | ||||||||||||||||||||||||||||
Total Apple | $ | 42,358 | $ | 50,557 | $ | 49,605 | -16 | % | -15 | % | |||||||||||||||||||||||||
(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. |