Apple
APPLE INC (Form: 8-K, Received: 04/23/2014 16:32:20)

 

 

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

April 23, 2014

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, California 95014

(Address of principal executive offices) (Zip Code)

(408) 996-1010

(Registrant’s telephone number, including area code)

Not applicable

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

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

 

¨  

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨  

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨  

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨  

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 2.02 Results of Operations and Financial Condition.

On April 23, 2014, Apple Inc. (“Apple”) issued a press release regarding Apple’s financial results for its second fiscal quarter ended March 29, 2014 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.

 

Exhibit

Number

  

Description

99.1    Text of press release issued by Apple Inc. on April 23, 2014.
99.2    Data sheet issued by Apple Inc. on April 23, 2014.


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, thereunto duly authorized.

 

    APPLE INC.
Date: April 23, 2014     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. on April 23, 2014.
99.2    Data sheet issued by Apple Inc. on April 23, 2014.

Exhibit 99.1

Apple Reports Second Quarter Results

Strong iPhone Sales Drive Record March Quarter Revenue and 15 Percent EPS Growth

CUPERTINO, California—April 23, 2014—Apple ® today announced financial results for its fiscal 2014 second quarter ended March 29, 2014. The Company posted quarterly revenue of $45.6 billion and quarterly net profit of $10.2 billion, or $11.62 per diluted share. These results compare to revenue of $43.6 billion and net profit of $9.5 billion, or $10.09 per diluted share, in the year-ago quarter. Gross margin was 39.3 percent compared to 37.5 percent in the year-ago quarter. International sales accounted for 66 percent of the quarter’s revenue.

“We’re very proud of our quarterly results, especially our strong iPhone sales and record revenue from services,” said Tim Cook, Apple’s CEO. “We’re eagerly looking forward to introducing more new products and services that only Apple could bring to market.”

“We generated $13.5 billion in cash flow from operations and returned almost $21 billion in cash to shareholders through dividends and share repurchases during the March quarter,” said Peter Oppenheimer, Apple’s CFO. “That brings cumulative payments under our capital return program to $66 billion.”

Apple is providing the following guidance for its fiscal 2014 third quarter:

 

 

revenue between $36 billion and $38 billion

 

gross margin between 37 percent and 38 percent

 

operating expenses between $4.4 billion and $4.5 billion

 

other income/(expense) of $200 million

 

tax rate of 26.1 percent

Apple will provide live streaming of its Q2 2014 financial results conference call beginning at 2:00 p.m. PDT on April 23, 2014 at www.apple.com/quicktime/qtv/earningsq214. This webcast will also be available for replay for approximately two weeks thereafter.


This press release contains forward-looking statements including without limitation those about the Company’s estimated revenue, gross margin, operating expenses, other income/(expense), and tax rate. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include without limitation the effect of competitive and economic factors, and the Company’s reaction to those factors, on consumer and business buying decisions with respect to the Company’s products; continued competitive pressures in the marketplace; the ability of the Company to deliver to the marketplace and stimulate customer demand for new programs, products, and technological innovations on a timely basis; the effect that product introductions and transitions, changes in product pricing or mix, and/or increases in component costs could have on the Company’s gross margin; the inventory risk associated with the Company’s need to order or commit to order product components in advance of customer orders; the continued availability on acceptable terms, or at all, of certain components and services essential to the Company’s business currently obtained by the Company from sole or limited sources; the effect that the Company’s dependency on manufacturing and logistics services provided by third parties may have on the quality, quantity or cost of products manufactured or services rendered; risks associated with the Company’s international operations; the Company’s reliance on third-party intellectual property and digital content; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; the Company’s dependency on the performance of distributors, carriers and other resellers of the Company’s products; the effect that product and service quality problems could have on the Company’s sales and operating profits; the continued service and availability of key executives and employees; war, terrorism, public health issues, natural disasters, and other circumstances that could disrupt supply, delivery, or demand of products; and unfavorable results of other legal proceedings. More information on potential factors that could affect the Company’s financial results is included from time to time in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s public reports filed with the SEC, including the Company’s Form 10-K for the fiscal year ended September 28, 2013, its Form 10-Q for the quarter ended December 28, 2013, and its Form 10-Q for the quarter ended March 29, 2014 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 designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad.

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.

© 2014 Apple Inc. All rights reserved. Apple, the Apple logo, Mac, Mac OS and Macintosh are trademarks of Apple. Other company and product names may be trademarks of their respective owners.


Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

 

                                                                                                   
     Three Months Ended      Six Months Ended  
     March 29,
2014
     March 30,
2013
     March 29,
2014
     March 30,
2013
 

Net sales

   $ 45,646       $ 43,603       $ 103,240       $ 98,115   

Cost of sales (1)

     27,699         27,254         63,447         60,706   
  

 

 

    

 

 

    

 

 

    

 

 

 

Gross margin

     17,947         16,349         39,793         37,409   
  

 

 

    

 

 

    

 

 

    

 

 

 

Operating expenses:

           

Research and development (1)

     1,422         1,119         2,752         2,129   

Selling, general and administrative (1)

     2,932         2,672         5,985         5,512   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total operating expenses

     4,354         3,791         8,737         7,641   
  

 

 

    

 

 

    

 

 

    

 

 

 

Operating income

     13,593         12,558         31,056         29,768   

Other income/(expense), net

     225         347         471         809   
  

 

 

    

 

 

    

 

 

    

 

 

 

Income before provision for income taxes

     13,818         12,905         31,527         30,577   

Provision for income taxes

     3,595         3,358         8,232         7,952   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income

   $ 10,223       $ 9,547       $ 23,295       $ 22,625   
  

 

 

    

 

 

    

 

 

    

 

 

 

Earnings per share:

           

Basic

   $ 11.69       $ 10.16       $ 26.31       $ 24.09   

Diluted

   $ 11.62       $ 10.09       $ 26.16       $ 23.90   

Shares used in computing earnings per share:

           

Basic

     874,757         939,629         885,415         939,273   

Diluted

     879,528         946,035         890,490         946,626   

Cash dividends declared per common share

   $ 3.05       $ 2.65       $ 6.10       $ 5.30   

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

  

     

Cost of sales

   $ 110       $ 87       $ 219       $ 172   

Research and development

   $ 300       $ 239       $ 589       $ 463   

Selling, general and administrative

   $ 286       $ 249       $ 569       $ 485   


Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

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

 

                                                 
     March 29,
2014
    September 28,
2013
 
ASSETS:   

Current assets:

    

Cash and cash equivalents

   $ 18,949      $ 14,259   

Short-term marketable securities

     22,401        26,287   

Accounts receivable, less allowances of $88 and $99, respectively

     9,700        13,102   

Inventories

     1,829        1,764   

Deferred tax assets

     4,014        3,453   

Vendor non-trade receivables

     6,120        7,539   

Other current assets

     7,528        6,882   
  

 

 

   

 

 

 

Total current assets

     70,541        73,286   

Long-term marketable securities

     109,239        106,215   

Property, plant and equipment, net

     15,120        16,597   

Goodwill

     2,055        1,577   

Acquired intangible assets, net

     3,928        4,179   

Other assets

     5,106        5,146   
  

 

 

   

 

 

 

Total assets

   $ 205,989      $ 207,000   
  

 

 

   

 

 

 
LIABILITIES AND SHAREHOLDERS’ EQUITY:   

Current liabilities:

    

Accounts payable

   $ 18,914      $ 22,367   

Accrued expenses

     15,984        13,856   

Deferred revenue

     8,310        7,435   
  

 

 

   

 

 

 

Total current liabilities

     43,208        43,658   

Deferred revenue – non-current

     3,164        2,625   

Long-term debt

     16,962        16,960   

Other non-current liabilities

     22,476        20,208   
  

 

 

   

 

 

 

Total liabilities

     85,810        83,451   
  

 

 

   

 

 

 

Commitments and contingencies

    

Shareholders’ equity:

    

Common stock and additional paid-in capital, $0.00001 par value: 1,800,000 shares authorized; 861,745 and 899,213 shares issued and outstanding, respectively

     21,496        19,764   

Retained earnings

     98,934        104,256   

Accumulated other comprehensive income/(loss)

     (251     (471
  

 

 

   

 

 

 

Total shareholders’ equity

     120,179        123,549   
  

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 205,989      $ 207,000   
  

 

 

   

 

 

 


Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

 

                                                 
     Six Months Ended  
     March 29,
2014
    March 30,
2013
 

Cash and cash equivalents, beginning of the period

   $ 14,259      $ 10,746   
  

 

 

   

 

 

 

Operating activities:

    

Net income

     23,295        22,625   

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

    

Depreciation and amortization

     4,031        3,280   

Share-based compensation expense

     1,377        1,120   

Deferred income tax expense

     2,059        1,957   

Changes in operating assets and liabilities:

    

Accounts receivable, net

     3,401        3,846   

Inventories

     (65     (454

Vendor non-trade receivables

     1,419        1,510   

Other current and non-current assets

     14        1,269   

Accounts payable

     (2,375     (4,422

Deferred revenue

     1,414        1,541   

Other current and non-current liabilities

     1,638        3,658   
  

 

 

   

 

 

 

Cash generated by operating activities

     36,208        35,930   
  

 

 

   

 

 

 

Investing activities:

    

Purchases of marketable securities

     (90,360     (81,163

Proceeds from maturities of marketable securities

     10,869        9,243   

Proceeds from sales of marketable securities

     80,241        49,188   

Payments made in connection with business acquisitions, net

     (559     (299

Payments for acquisition of property, plant and equipment

     (3,367     (4,325

Payments for acquisition of intangible assets

     (163     (429

Other

     (23     (93
  

 

 

   

 

 

 

Cash used in investing activities

     (3,362     (27,878
  

 

 

   

 

 

 

Financing activities:

    

Proceeds from issuance of common stock

     341        275   

Excess tax benefits from equity awards

     363        502   

Taxes paid related to net share settlement of equity awards

     (430     (588

Dividends and dividend equivalents paid

     (5,430     (4,984

Repurchase of common stock

     (23,000     (1,950
  

 

 

   

 

 

 

Cash used in financing activities

     (28,156     (6,745
  

 

 

   

 

 

 

Increase in cash and cash equivalents

     4,690        1,307   
  

 

 

   

 

 

 

Cash and cash equivalents, end of the period

   $ 18,949      $ 12,053   
  

 

 

   

 

 

 

Supplemental cash flow disclosure:

    

Cash paid for income taxes, net

   $ 5,369      $ 4,258   

Cash paid for interest

   $ 161      $ 0   

Exhibit 99.2

Apple Inc.

Q2 2014 Unaudited Summary Data

(Units in thousands, Revenue in millions)

 

                                                                                                                                                                                             
    Q2’14     Q1’14     Q2’13     Sequential Change     Year/Year Change  
          Revenue           Revenue           Revenue           Revenue           Revenue  

Operating Segments

                     

Americas

    $ 14,310        $ 20,098        $ 14,052          -29%          2%   

Europe

      10,230          13,073          9,800          -22%          4%   

Greater China (a)

      9,289          8,844          8,213          5%          13%   

Japan

      3,963          4,948          3,135          -20%          26%   

Rest of Asia Pacific

      2,627          3,633          3,162          -28%          -17%   

Retail

      5,227          6,998          5,241          -25%          0%   
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Total Apple

    $ 45,646        $ 57,594        $ 43,603          -21%          5%   
   

 

 

     

 

 

     

 

 

         
                               
    Q2’14     Q1’14     Q2’13     Sequential Change     Year/Year Change  
    Units     Revenue     Units     Revenue     Units     Revenue     Units     Revenue     Units     Revenue  

Product Summary

                     

iPhone (b)

    43,719      $ 26,064        51,025      $ 32,498        37,430      $ 22,955        -14%        -20%        17%        14%   

iPad (b)

    16,350        7,610        26,035        11,468        19,477        8,746        -37%        -34%        -16%        -13%   

Mac (b)

    4,136        5,519        4,837        6,395        3,952        5,447        -14%        -14%        5%        1%   

iPod (b)

    2,761        461        6,049        973        5,633        962        -54%        -53%        -51%        -52%   

iTunes/Software/Services (c)

      4,573          4,397          4,114          4%          11%   

Accessories (d)

      1,419          1,863          1,379          -24%          3%   
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Total Apple

    $ 45,646        $ 57,594        $ 43,603          -21%          5%   
   

 

 

     

 

 

     

 

 

         
         

 

 

                             

 

(a) Greater China includes China, Hong Kong and Taiwan.

 

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

 

(c) Includes revenue from sales on the iTunes Store, the App Store, the Mac App Store, and the iBooks Store, and revenue from sales of AppleCare, licensing and other services.

 

(d) Includes sales of hardware peripherals and Apple-branded and third-party accessories for iPhone, iPad, Mac and iPod.