Apple
APPLE INC (Form: 8-K, Received: 07/21/2009 16:29:57)

 

 

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

July 21, 2009

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 July 21, 2009, Apple Inc. (“Apple”) issued a press release regarding Apple’s financial results for its third fiscal quarter ended June 27, 2009 and a related data sheet. A copy of Apple’s press release is attached hereto as Exhibit 99.1 and a copy of the related data sheet is attached hereto as Exhibit 99.2.

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 July 21, 2009.
99.2    Data sheet issued by Apple Inc. dated July 21, 2009.


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: July 21, 2009     By:   /s/ Peter Oppenheimer
       

Peter Oppenheimer

Senior Vice President and

Chief Financial Officer


EXHIBIT INDEX

 

Exhibit

Number

  

Description

99.1    Text of press release issued by Apple Inc. dated July 21, 2009.
99.2    Data sheet issued by Apple Inc. dated July 21, 2009.

Exhibit 99.1

Apple Reports Third Quarter Results

Best Non-Holiday Quarter Revenue and Earnings in Apple History

CUPERTINO, California—July 21, 2009—Apple ® today announced financial results for its fiscal 2009 third quarter ended June 27, 2009. The Company posted revenue of $8.34 billion and a net quarterly profit of $1.23 billion, or $1.35 per diluted share. These results compare to revenue of $7.46 billion and net quarterly profit of $1.07 billion, or $1.19 per diluted share, in the year-ago quarter. Gross margin was 36.3 percent, up from 34.8 percent in the year-ago quarter. International sales accounted for 44 percent of the quarter’s revenue.

In accordance with the subscription accounting treatment required by GAAP, the Company recognizes revenue and cost of goods sold for iPhone™ and Apple TV ® over their estimated economic lives. Adjusting GAAP sales and product costs to eliminate the impact of subscription accounting, the corresponding non-GAAP measures* for the quarter are $9.74 billion of “Adjusted Sales” and $1.94 billion of “Adjusted Net Income.”

Apple sold 2.6 million Macintosh ® computers during the quarter, representing a four percent unit increase over the year-ago quarter. The Company sold 10.2 million iPods during the quarter, representing a seven percent unit decline from the year-ago quarter. Quarterly iPhones sold were 5.2 million, representing 626 percent unit growth over the year-ago quarter.

“We’re making our most innovative products ever and our customers are responding,” said Steve Jobs, Apple’s CEO. “We’re thrilled to have sold over 5.2 million iPhones during the quarter and users have downloaded more than 1.5 billion applications from our App Store in its first year.”

“We’re extremely pleased to report record non-holiday quarter revenue and earnings and quarterly cash flow from operations of $2.3 billion,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the fourth fiscal quarter of 2009, we expect revenue in the range of about $8.7 billion to $8.9 billion and we expect diluted earnings per share in the range of about $1.18 to $1.23.”


Apple will provide live streaming of its Q3 2009 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. PDT on July 21, 2009 at www.apple.com/quicktime/qtv/earningsq309/ and will also be available for replay for approximately two weeks thereafter.

*Non-GAAP Financial Measures

During fiscal 2007, the Company began selling iPhone and Apple TV. Because the Company may provide unspecified features and additional software products to iPhone and Apple TV customers in the future free of charge, in accordance with GAAP the Company recognizes revenue and cost of goods sold for these products on a straight-line basis over their economic lives, with any loss recognized at the time of sale. Currently, the economic lives of these products are estimated to be 24 months. This accounting treatment, referred to as subscription accounting, results in the deferral of almost all of the revenue and cost of goods sold during the quarter in which the products are sold to the customer. Other costs related to these products, including costs for engineering, sales, marketing and warranty, are expensed as incurred. Further, the costs to develop any future unspecified features and additional software products that may eventually be provided to customers also are expensed as incurred. In contrast, the Company generally recognizes revenue and cost of goods sold for its other products, such as Macs and iPods, at the time of sale, as the Company does not provide future unspecified features or additional software products to those customers free of charge.

In July 2008, the Company began selling iPhone 3G, the second-generation iPhone, and at that time significantly expanded distribution by establishing carrier relationships in over 70 countries. Unit sales of iPhone 3G have been significantly greater than sales of the first-generation iPhone. During the first quarter of iPhone 3G availability ended September 27, 2008, 6.9 million units were sold, exceeding the 6.1 million first-generation iPhone units sold in the prior five quarters combined.


In June 2009, the Company began selling iPhone 3GS, the third-generation iPhone. Unit sales of iPhones continued to be significant in the quarter ended June 27, 2009, with 5.2 million iPhones sold. As a result, the amount of revenue and product cost related to those iPhone sales that the Company deferred for recognition in future periods under subscription accounting was substantial. While the GAAP results provide significant insight into the Company’s operations and financial position, management continues to supplement its analysis of the business using financial measures that look at the total sales, related product costs and resulting income for iPhones and Apple TVs sold to customers during the period. The presentation at the end of this press release includes the following non-GAAP measures: “Adjusted Sales,” “Adjusted Cost of Sales,” “Adjusted Gross Margin,” “Adjusted Operating Margin,” “Adjusted Net Income” and “Adjusted Diluted Earnings per Share.” These financial measures are not consistent with GAAP because they do not reflect the deferral of revenue and product costs for recognition in later periods. The above-mentioned non-GAAP measures are generated by adjusting the related GAAP measures solely to reverse the effect of subscription accounting. The Company uses these financial measures, along with other measures discussed below, to provide additional insight into current operating and business trends not readily apparent from the GAAP results.

Management uses Adjusted Sales to evaluate the Company’s growth rate, revenue mix and performance relative to competitors. Given the impact of iPhone unit sales during the quarter ended June 27, 2009, Adjusted Sales provides a meaningful measurement of the Company’s growth by reflecting amounts generally due to Apple at the time of sale related to products sold within the period. Further, eliminating the effects of deferred revenue (current sales deferred to future periods and prior sales being recognized currently) provides more transparency into the Company’s underlying sales trends. Management uses the non-GAAP measures of “Adjusted Cost of Sales,” “Adjusted Gross Margin” and “Adjusted Operating Margin” to measure the Company’s operating performance based on current period iPhone and Apple TV sales and to facilitate ongoing operating decisions. Additionally, because the Company recognizes engineering, sales, and marketing expenses as incurred, including expenses related to iPhone and Apple TV, management uses Adjusted Sales to evaluate returns on those costs, to manage year-over-year operating expense growth, and to budget future expenses. Furthermore, because they are considered meaningful indicators of current business performance, the non-GAAP measures “Adjusted Sales” and “Adjusted Operating Margin” are metrics that factor into the determination of management compensation beginning in fiscal year 2009. Finally, management uses the non-GAAP measures of “Adjusted Net Income” and “Adjusted Diluted Earnings per Share” to measure the Company’s operating performance based on current period iPhone and Apple TV sales, to facilitate ongoing operating decisions, and compare performance relative to competitors.


Management believes that these non-GAAP financial measures, when taken together with the corresponding consolidated GAAP measures and related segment information, provide incremental insight into the underlying factors and trends affecting both the Company’s performance and its cash generating potential. Management believes these non-GAAP measures increase the transparency of the Company’s current results and enable investors to more fully understand trends in its current and future performance.

Cautions on Use of Non-GAAP Measures

As noted previously, these non-GAAP financial measures are not consistent with GAAP because they do not reflect the deferral of revenue and product costs for recognition in later periods. These non-GAAP financial measures do not adjust for the costs associated with the Company’s intention to provide unspecified new features and software to purchasers of iPhone and Apple TV products. These costs are expensed as incurred under GAAP’s subscription accounting model, and are not adjusted in these non-GAAP financial measures. As such, these non-GAAP financial measures are not intended to reflect in a given period all of the costs of sales made in that period. Rather, the non-GAAP financial measures presented below are intended for the limited purpose of presenting performance measures that include the total sales, related product costs, and resulting income for iPhones and Apple TVs in the period those products are sold to customers.


Management believes investors will benefit from greater transparency in referring to these non-GAAP financial measures when assessing the Company’s operating results, as well as when forecasting and analyzing future periods. However, management recognizes that:

 

 

these non-GAAP financial measures are limited in their usefulness and should be considered only as a supplement to the Company’s GAAP financial measures;

 

 

these non-GAAP financial measures should not be considered in isolation from, or as a substitute for, the Company’s GAAP financial measures;

 

 

these non-GAAP financial measures should not be considered to be superior to the Company’s GAAP financial measures;

 

 

these non-GAAP financial measures were not prepared in accordance with GAAP and investors should not assume that the non-GAAP financial measures presented in this earnings release were prepared under a comprehensive set of rules or principles;

 

 

these non-GAAP financial measures are not presented with comparable non-GAAP financial measures for prior periods, although management intends to continue to track and present these non-GAAP financial measures for future periods; and

 

 

until management presents comparable non-GAAP financial measures for additional periods, these non-GAAP financial measures do not provide any information regarding trends in the Company’s performance and, as such, investors should not assume that the presentation of these non-GAAP financial measures reflects any positive or negative trends in the Company’s performance.

Further, these non-GAAP financial measures may be unique to the Company, as they may be different from non-GAAP financial measures used by other companies. As such, this presentation of non-GAAP financial measures may not enhance the comparability of the Company’s results to the results of other companies.

A reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure or measures appears at the end of this press release.


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; 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; 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 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; war, terrorism, public health issues, and other circumstances that could disrupt supply, delivery, or demand of products; the continued service and availability of key executives and employees; unfavorable results of other legal proceedings; and the Company’s dependency on the performance of distributors and other resellers of the Company’s products. 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 27, 2008, its Form 10-Q for the quarter ended December 27, 2008, its Form 10-Q for the quarter ended March 28, 2009, and its Form 10-Q for the quarter ended June 27, 2009 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 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.

© 2009 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    Nine Months Ended
     June 27,
2009
   June 28,
2008
   June 27,
2009
   June 28,
2008

Net sales

   $ 8,337    $ 7,464    $ 26,667    $ 24,584

Cost of sales (1)

     5,314      4,864      17,141      16,178
                           

Gross margin

     3,023      2,600      9,526      8,406
                           

Operating expenses:

           

Research and development (1)

     341      292      975      811

Selling, general, and administrative (1)

     1,010      916      3,086      2,762
                           

Total operating expenses

     1,351      1,208      4,061      3,573
                           

Operating income

     1,672      1,392      5,465      4,833

Other income and expense

     60      118      281      480
                           

Income before provision for income taxes

     1,732      1,510      5,746      5,313

Provision for income taxes

     503      438      1,707      1,615
                           

Net income

   $ 1,229    $ 1,072    $ 4,039    $ 3,698
                           

Earnings per common share:

           

Basic

   $ 1.38    $ 1.21    $ 4.53    $ 4.20

Diluted

   $ 1.35    $ 1.19    $ 4.47    $ 4.10

Shares used in computing earnings per share:

           

Basic

     893,712      883,738      891,345      879,753

Diluted

     909,160      903,167      904,549      901,028

(1)  Includes stock-based compensation expense as follows:

           

Cost of sales

   $ 28    $ 21    $ 85    $ 59

Research and development

   $ 65    $ 47    $ 192    $ 133

Selling, general, and administrative

   $ 86    $ 65    $ 253    $ 183


UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except share amounts)

 

          June 27,     
2009
   September 27,
2008
ASSETS:      

Current assets:

     

Cash and cash equivalents

   $ 5,605    $ 11,875

Short-term marketable securities

     18,617      10,236

Accounts receivable, less allowances of $58 and $47, respectively

     2,686      2,422

Inventories

     380      509

Deferred tax assets

     1,731      1,447

Other current assets

     6,151      5,822
             

Total current assets

     35,170      32,311

Long-term marketable securities

     6,899      2,379

Property, plant and equipment, net

     2,653      2,455

Goodwill

     207      207

Acquired intangible assets, net

     259      285

Other assets

     2,952      1,935
             

Total assets

   $ 48,140    $ 39,572
             
LIABILITIES AND SHAREHOLDERS’ EQUITY:      

Current liabilities:

     

Accounts payable

   $ 4,854    $ 5,520

Accrued expenses

     3,338      3,719

Deferred revenue

     8,469      4,853
             

Total current liabilities

     16,661      14,092

Deferred revenue—non-current

     3,667      3,029

Other non-current liabilities

     1,924      1,421
             

Total liabilities

     22,252      18,542
             

Commitments and contingencies

     

Shareholders’ equity:

     

Common stock, no par value; 1,800,000,000 shares authorized; 895,735,210 and 888,325,973 shares issued and outstanding, respectively

     7,957      7,177

Retained earnings

     17,878      13,845

Accumulated other comprehensive income

     53      8
             

Total shareholders’ equity

     25,888      21,030
             

Total liabilities and shareholders’ equity

   $ 48,140    $ 39,572
             


UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

 

     Nine Months Ended  
     June 27,
2009
    June 28,
2008
 

Cash and cash equivalents, beginning of the period

   $ 11,875      $ 9,352   
                

Operating Activities:

    

Net income

     4,039        3,698   

Adjustments to reconcile net income to cash generated by operating activities:

    

Depreciation, amortization, and accretion

     506        339   

Stock-based compensation expense

     530        375   

Deferred income tax (benefit)/expense

     (201     41   

Loss on disposition of property, plant and equipment

     18        15   

Changes in operating assets and liabilities:

    

Accounts receivable, net

     (264     34   

Inventories

     129        (199

Other current assets

     (298     (100

Other assets

     (816     101   

Accounts payable

     (648     (1,226

Deferred revenue

     4,254        1,823   

Other liabilities

     (200     400   
                

Cash generated by operating activities

     7,049        5,301   
                

Investing Activities:

    

Purchases of marketable securities

     (34,696     (17,153

Proceeds from maturities of marketable securities

     12,780        9,378   

Proceeds from sales of marketable securities

     9,117        2,367   

Purchases of other long-term investments

     (61     (31

Payment for acquisition of property, plant and equipment

     (685     (688

Payment for acquisition of intangible assets

     (56     (89

Other

     (62     20   
                

Cash used in investing activities

     (13,663     (6,196
                

Financing Activities:

    

Proceeds from issuance of common stock

     288        411   

Excess tax benefits from stock-based compensation

     124        621   

Cash used to net share settle equity awards

     (68     (116
                

Cash generated by financing activities

     344        916   
                

(Decrease)/Increase in cash and cash equivalents

     (6,270     21   
                

Cash and cash equivalents, end of the period

   $ 5,605      $ 9,373   
                

Supplemental cash flow disclosure:

    

Cash paid for income taxes, net

   $ 2,490      $ 1,022   


UNAUDITED CONSOLIDATED SCHEDULE OF DEFERRED REVENUE

(In millions)

 

          June 27,     
2009
       March 28,    
2009
   September 27,
2008

Deferred revenue—current:

        

iPhone and Apple TV

   $ 6,767    $ 5,467    $ 3,518

AppleCare

     725      659      599

Other

     977      888      736
                    

Total deferred revenue—current

     8,469      7,014      4,853
                    

Deferred revenue—non-current:

        

iPhone and Apple TV

     2,860      2,676      2,262

AppleCare

     653      638      651

Other

     154      146      116
                    

Total deferred revenue—non-current

     3,667      3,460      3,029
                    

Total deferred revenue

   $ 12,136    $ 10,474    $ 7,882
                    


UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS OF OPERATIONS

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

 

     Three Months Ended June 27, 2009
     As Reported
in accordance
  with GAAP  
   Non-GAAP
Adjustments
      Non-GAAP  

Net sales

   $ 8,337    $ 1,405 (a)    $ 9,742

Cost of sales

     5,314      400 (b)      5,714

Gross margin

     3,023      1,005 (c)      4,028

Operating expenses

     1,351      —          1,351

Operating income

     1,672      1,005 (c)      2,677

Net income

   $ 1,229    $ 713 (d)    $ 1,942

Earnings per diluted common share

   $ 1.35    $ 0.79 (e)    $ 2.14

Shares used in computing diluted earnings per share

     909,160        909,160

Footnotes:

 

(a) Non-GAAP adjustment to net sales reflect (i) the reversal of the current period’s amortization of deferred revenue derived from iPhone handsets and Apple TV units shipped in current and prior periods and (ii) the inclusion of amounts generally due to Apple at the time of sale related to iPhone handsets and Apple TV units shipped in the current period.

 

(b) Non-GAAP adjustment to cost of sales reflect (i) the reversal of the current period’s amortization of deferred cost related to iPhone handsets and Apple TV units shipped in current and prior periods and (ii) the inclusion of the total cost of iPhone handsets and Apple TV units shipped in the current period. In addition, the non-GAAP adjustment to cost of sales reflects the estimate of the warranty expense in the period when the related product is sold, rather than when the expense is incurred. The non-GAAP adjustment to cost of sales does not reflect the cost of providing unspecified additional software products and upgrades.

 

(c) Non-GAAP adjustments to gross margin and operating income are the difference between non-GAAP adjustments to net sales and non-GAAP adjustments to cost of sales [(a)—(b)].

 

(d) Represents the after-tax effect of the non-GAAP adjustments to gross margin and operating income. The tax effect on the non-GAAP adjustments to gross margin and operating income is estimated by applying the period’s effective tax rate to the non-GAAP adjustments. The tax effect on the non-GAAP adjustments is $292 million for the three months ended June 27, 2009. The non-GAAP adjustment to net income does not reflect any changes to the Company’s other income and expense.

 

(e) Represents the per share impact of the non-GAAP adjustments to net income.

Exhibit 99.2

Apple Inc.

Q3 2009 Unaudited Summary Data

 

     Q2 2009     Q3 2008     Q3 2009     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

   809    $ 3,517       1,134    $ 3,435       1,147    $ 3,827       42   9   1   11

Europe

   658      2,097      576      1,648      626      2,006      - 5   - 4   9   22

Japan

   109      500      102      365      108      416      - 1   - 17   6    14

Retail

   438      1,471      476      1,445      492      1,496       12   2   3   4

Other Segments (1)

   202      578      208      571      230      592      14   2    11   4
                                               

Total Operating Segments

       2,216    $   8,163          2,496    $   7,464          2,603    $   8,337      17   2   4   12
                                               
                       
     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)

   818    $ 1,050       943    $ 1,373       849    $ 1,129       4   8   - 10   - 18

Portables (3)

   1,398      1,895      1,553      2,237      1,754      2,200      25   16   13   - 2
                                               

Subtotal CPUs

   2,216      2,945      2,496      3,610      2,603      3,329      17   13   4   - 8

iPod

   11,013      1,665      11,011      1,678      10,215      1,492      - 7   - 10   - 7   - 11

Other Music Related Products and Services (4)

        1,049           819           958        - 9     17

iPhone and Related Products and Services (5)

   3,793      1,521      717      419      5,208      1,689      37   11   626   303

Peripherals and Other Hardware

        358           437           341        - 5     - 22

Software, Service and Other Sales

        625           501           528        - 16     5
                                         

Total Apple

      $ 8,163         $ 7,464         $ 8,337        2     12
                                         

 

(1) Other Segments include Asia Pacific and FileMaker.

 

(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