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 May 2, 2017. | |
99.2 | Data sheet issued by Apple Inc. on May 2, 2017. |
Date: | May 2, 2017 | 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 May 2, 2017. | |
99.2 | Data sheet issued by Apple Inc. on May 2, 2017. |
• | revenue between $43.5 billion and $45.5 billion |
• | gross margin between 37.5 percent and 38.5 percent |
• | operating expenses between $6.6 billion and $6.7 billion |
• | other income/(expense) of $450 million |
• | tax rate of 25.5 percent |
Three Months Ended | Six Months Ended | ||||||||||||||
April 1, 2017 | March 26, 2016 | April 1, 2017 | March 26, 2016 | ||||||||||||
Net sales | $ | 52,896 | $ | 50,557 | $ | 131,247 | $ | 126,429 | |||||||
Cost of sales (1) | 32,305 | 30,636 | 80,480 | 76,085 | |||||||||||
Gross margin | 20,591 | 19,921 | 50,767 | 50,344 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development (1) | 2,776 | 2,511 | 5,647 | 4,915 | |||||||||||
Selling, general and administrative (1) | 3,718 | 3,423 | 7,664 | 7,271 | |||||||||||
Total operating expenses | 6,494 | 5,934 | 13,311 | 12,186 | |||||||||||
Operating income | 14,097 | 13,987 | 37,456 | 38,158 | |||||||||||
Other income/(expense), net | 587 | 155 | 1,408 | 557 | |||||||||||
Income before provision for income taxes | 14,684 | 14,142 | 38,864 | 38,715 | |||||||||||
Provision for income taxes | 3,655 | 3,626 | 9,944 | 9,838 | |||||||||||
Net income | $ | 11,029 | $ | 10,516 | $ | 28,920 | $ | 28,877 | |||||||
Earnings per share: | |||||||||||||||
Basic | $ | 2.11 | $ | 1.91 | $ | 5.50 | $ | 5.22 | |||||||
Diluted | $ | 2.10 | $ | 1.90 | $ | 5.46 | $ | 5.19 | |||||||
Shares used in computing earnings per share: | |||||||||||||||
Basic | 5,225,791 | 5,514,381 | 5,262,226 | 5,536,656 | |||||||||||
Diluted | 5,261,688 | 5,540,886 | 5,294,841 | 5,567,506 | |||||||||||
Cash dividends declared per share | $ | 0.57 | $ | 0.52 | $ | 1.14 | $ | 1.04 | |||||||
(1) Includes share-based compensation expense as follows: | |||||||||||||||
Cost of sales | $ | 217 | $ | 191 | $ | 446 | $ | 395 | |||||||
Research and development | $ | 575 | $ | 468 | $ | 1,164 | $ | 934 | |||||||
Selling, general and administrative | $ | 425 | $ | 389 | $ | 863 | $ | 797 |
April 1, 2017 | September 24, 2016 | ||||||
ASSETS: | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 15,157 | $ | 20,484 | |||
Short-term marketable securities | 51,944 | 46,671 | |||||
Accounts receivable, less an allowance of $53 at each period end | 11,579 | 15,754 | |||||
Inventories | 2,910 | 2,132 | |||||
Vendor non-trade receivables | 9,033 | 13,545 | |||||
Other current assets | 11,367 | 8,283 | |||||
Total current assets | 101,990 | 106,869 | |||||
Long-term marketable securities | 189,740 | 170,430 | |||||
Property, plant and equipment, net | 27,163 | 27,010 | |||||
Goodwill | 5,473 | 5,414 | |||||
Acquired intangible assets, net | 2,617 | 3,206 | |||||
Other non-current assets | 7,549 | 8,757 | |||||
Total assets | $ | 334,532 | $ | 321,686 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY: | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 28,573 | $ | 37,294 | |||
Accrued expenses | 23,096 | 22,027 | |||||
Deferred revenue | 7,682 | 8,080 | |||||
Commercial paper | 9,992 | 8,105 | |||||
Current portion of long-term debt | 3,999 | 3,500 | |||||
Total current liabilities | 73,342 | 79,006 | |||||
Deferred revenue, non-current | 3,107 | 2,930 | |||||
Long-term debt | 84,531 | 75,427 | |||||
Other non-current liabilities | 39,470 | 36,074 | |||||
Total liabilities | 200,450 | 193,437 | |||||
Commitments and contingencies | |||||||
Shareholders’ equity: | |||||||
Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 5,205,815 and 5,336,166 shares issued and outstanding, respectively | 33,579 | 31,251 | |||||
Retained earnings | 100,925 | 96,364 | |||||
Accumulated other comprehensive income/(loss) | (422 | ) | 634 | ||||
Total shareholders’ equity | 134,082 | 128,249 | |||||
Total liabilities and shareholders’ equity | $ | 334,532 | $ | 321,686 |
Six Months Ended | |||||||
April 1, 2017 | March 26, 2016 | ||||||
Cash and cash equivalents, beginning of the period | $ | 20,484 | $ | 21,120 | |||
Operating activities: | |||||||
Net income | 28,920 | 28,877 | |||||
Adjustments to reconcile net income to cash generated by operating activities: | |||||||
Depreciation and amortization | 5,319 | 5,431 | |||||
Share-based compensation expense | 2,473 | 2,126 | |||||
Deferred income tax expense | 2,822 | 3,092 | |||||
Other | (209 | ) | 308 | ||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable, net | 4,183 | 4,538 | |||||
Inventories | (778 | ) | 68 | ||||
Vendor non-trade receivables | 4,512 | 5,899 | |||||
Other current and non-current assets | (896 | ) | 186 | ||||
Accounts payable | (6,862 | ) | (9,388 | ) | |||
Deferred revenue | (221 | ) | 219 | ||||
Other current and non-current liabilities | 316 | (2,292 | ) | ||||
Cash generated by operating activities | 39,579 | 39,064 | |||||
Investing activities: | |||||||
Purchases of marketable securities | (99,821 | ) | (86,242 | ) | |||
Proceeds from maturities of marketable securities | 12,429 | 9,148 | |||||
Proceeds from sales of marketable securities | 60,454 | 50,051 | |||||
Payments made in connection with business acquisitions, net | (67 | ) | (140 | ) | |||
Payments for acquisition of property, plant and equipment | (6,309 | ) | (5,948 | ) | |||
Payments for acquisition of intangible assets | (126 | ) | (657 | ) | |||
Payments for strategic investments | — | (126 | ) | ||||
Other | 116 | (196 | ) | ||||
Cash used in investing activities | (33,324 | ) | (34,110 | ) | |||
Financing activities: | |||||||
Proceeds from issuance of common stock | 273 | 247 | |||||
Excess tax benefits from equity awards | 225 | 264 | |||||
Payments for taxes related to net share settlement of equity awards | (788 | ) | (751 | ) | |||
Payments for dividends and dividend equivalents | (6,134 | ) | (5,871 | ) | |||
Repurchases of common stock | (18,012 | ) | (13,530 | ) | |||
Proceeds from issuance of term debt, net | 10,975 | 15,584 | |||||
Change in commercial paper, net | 1,879 | (503 | ) | ||||
Cash used in financing activities | (11,582 | ) | (4,560 | ) | |||
Increase/(Decrease) in cash and cash equivalents | (5,327 | ) | 394 | ||||
Cash and cash equivalents, end of the period | $ | 15,157 | $ | 21,514 | |||
Supplemental cash flow disclosure: | |||||||
Cash paid for income taxes, net | $ | 6,878 | $ | 6,630 | |||
Cash paid for interest | $ | 1,007 | $ | 565 |
Exhibit 99.2 | |||||||||||||||||||||||||||||||||||
Apple Inc. | |||||||||||||||||||||||||||||||||||
Q2 2017 Unaudited Summary Data | |||||||||||||||||||||||||||||||||||
(Units in thousands, Revenue in millions) | |||||||||||||||||||||||||||||||||||
Q2 2017 | Q1 2017 | Q2 2016 | Sequential Change | Year/Year Change | |||||||||||||||||||||||||||||||
Revenue | Revenue | Revenue | Revenue | Revenue | |||||||||||||||||||||||||||||||
Operating Segments | |||||||||||||||||||||||||||||||||||
Americas | $ | 21,157 | $ | 31,968 | $ | 19,096 | -34 | % | 11 | % | |||||||||||||||||||||||||
Europe | 12,733 | 18,521 | 11,535 | -31 | % | 10 | % | ||||||||||||||||||||||||||||
Greater China | 10,726 | 16,233 | 12,486 | -34 | % | -14 | % | ||||||||||||||||||||||||||||
Japan | 4,485 | 5,766 | 4,281 | -22 | % | 5 | % | ||||||||||||||||||||||||||||
Rest of Asia Pacific | 3,795 | 5,863 | 3,159 | -35 | % | 20 | % | ||||||||||||||||||||||||||||
Total Apple | $ | 52,896 | $ | 78,351 | $ | 50,557 | -32 | % | 5 | % | |||||||||||||||||||||||||
Q2 2017 | Q1 2017 | Q2 2016 | Sequential Change | Year/Year Change | |||||||||||||||||||||||||||||||
Units | Revenue | Units | Revenue | Units | Revenue | Units | Revenue | Units | Revenue | ||||||||||||||||||||||||||
Product Summary | |||||||||||||||||||||||||||||||||||
iPhone (1) | 50,763 | $ | 33,249 | 78,290 | $ | 54,378 | 51,193 | $ | 32,857 | -35 | % | -39 | % | -1 | % | 1 | % | ||||||||||||||||||
iPad (1) | 8,922 | 3,889 | 13,081 | 5,533 | 10,251 | 4,413 | -32 | % | -30 | % | -13 | % | -12 | % | |||||||||||||||||||||
Mac (1) | 4,199 | 5,844 | 5,374 | 7,244 | 4,034 | 5,107 | -22 | % | -19 | % | 4 | % | 14 | % | |||||||||||||||||||||
Services (2) | 7,041 | 7,172 | 5,991 | -2 | % | 18 | % | ||||||||||||||||||||||||||||
Other Products (1)(3) | 2,873 | 4,024 | 2,189 | -29 | % | 31 | % | ||||||||||||||||||||||||||||
Total Apple | $ | 52,896 | $ | 78,351 | $ | 50,557 | -32 | % | 5 | % | |||||||||||||||||||||||||
(1) | Includes deferrals and amortization of related software upgrade rights and non-software services. | ||||||||||||||||||||||||||||||||||
(2) | Includes revenue from Digital Content and 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. |