Apple
APPLE INC (Form: 8-K, Received: 10/20/2014 16:31:37)

 

 

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

October 20, 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)

 

(IRS Employer

Identification No.)

1 Infinite Loop

Cupertino, California 95014

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (408) 996-1010

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 October 20, 2014, Apple Inc. (“Apple”) issued a press release regarding Apple’s financial results for its fourth fiscal quarter ended September 27, 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 October 20, 2014.
99.2    Data sheet issued by Apple Inc. on October 20, 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 hereunto duly authorized.

 

    APPLE INC.
    By:   /s/ Luca Maestri
Date: October 20, 2014       Luca Maestri
       

Senior Vice President,

Chief Financial Officer


EXHIBIT INDEX

 

Exhibit

Number

  

Description

99.1    Text of press release issued by Apple Inc. on October 20, 2014.
99.2    Data sheet issued by Apple Inc. on October 20, 2014.

Exhibit 99.1

Apple Reports Fourth Quarter Results

Strong iPhone, Mac & App Store Sales Drive Record September Quarter Revenue & Earnings

CUPERTINO, California—October 20, 2014—Apple ® today announced financial results for its fiscal 2014 fourth quarter ended September 27, 2014. The Company posted quarterly revenue of $42.1 billion and quarterly net profit of $8.5 billion, or $1.42 per diluted share. These results compare to revenue of $37.5 billion and net profit of $7.5 billion, or $1.18 per diluted share, in the year-ago quarter. Gross margin was 38 percent compared to 37 percent in the year-ago quarter. International sales accounted for 60 percent of the quarter’s revenue.

Apple’s board of directors has declared a cash dividend of $.47 per share of the Company’s common stock. The dividend is payable on November 13, 2014, to shareholders of record as of the close of business on November 10, 2014.

“Our fiscal 2014 was one for the record books, including the biggest iPhone launch ever with iPhone 6 and iPhone 6 Plus,” said Tim Cook, Apple’s CEO. “With amazing innovations in our new iPhones, iPads and Macs, as well as iOS 8 and OS X Yosemite, we are heading into the holidays with Apple’s strongest product lineup ever. We are also incredibly excited about Apple Watch and other great products and services in the pipeline for 2015.”

“Our strong business performance drove EPS growth of 20 percent and a record $13.3 billion in cash flow from operations in the September quarter,” said Luca Maestri, Apple’s CFO. “We continued to execute aggressively against our capital return program, spending over $20 billion in the quarter and bringing cumulative returns to $94 billion.”

Apple is providing the following guidance for its fiscal 2015 first quarter:

 

  revenue between $63.5 billion and $66.5 billion

 

  gross margin between 37.5 percent and 38.5 percent

 

  operating expenses between $5.4 billion and $5.5 billion

 

  other income/(expense) of $325 million

 

  tax rate of 26.5 percent

Apple will provide live streaming of its Q4 2014 financial results conference call beginning at 2:00 p.m. PDT on October 20, 2014 at www.apple.com/quicktime/qtv/earningsq414. 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, its Form 10-Q for the quarter ended March 29, 2014, its Form 10-Q for the quarter ended June 28, 2014, and its Form 10-K for the fiscal year ended September 27, 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:

Kristin Huguet

Apple

khuguet@apple.com

(408) 974-2414

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        Twelve Months Ended  
       September 27,
2014
       September 28,
2013
       September 27,
2014
       September 28,
2013
 

Net sales

     $ 42,123         $ 37,472         $ 182,795         $ 170,910   

Cost of sales (1)

       26,114           23,601           112,258           106,606   
    

 

 

      

 

 

      

 

 

      

 

 

 

Gross margin

       16,009           13,871           70,537           64,304   
    

 

 

      

 

 

      

 

 

      

 

 

 

Operating expenses:

                   

Research and development (1)

       1,686           1,168           6,041           4,475   

Selling, general and administrative (1)

       3,158           2,673           11,993           10,830   
    

 

 

      

 

 

      

 

 

      

 

 

 

Total operating expenses

       4,844           3,841           18,034           15,305   
    

 

 

      

 

 

      

 

 

      

 

 

 

Operating income

       11,165           10,030           52,503           48,999   

Other income/(expense), net

       307           113           980           1,156   
    

 

 

      

 

 

      

 

 

      

 

 

 

Income before provision for income taxes

       11,472           10,143           53,483           50,155   

Provision for income taxes

       3,005           2,631           13,973           13,118   
    

 

 

      

 

 

      

 

 

      

 

 

 

Net income

     $ 8,467         $ 7,512         $ 39,510         $ 37,037   
    

 

 

      

 

 

      

 

 

      

 

 

 

Earnings per share:

                   

Basic

     $ 1.43         $ 1.19         $ 6.49         $ 5.72   

Diluted

     $ 1.42         $ 1.18         $ 6.45         $ 5.68   

Shares used in computing earnings per share:

                   

Basic

       5,933,845           6,329,139           6,085,572           6,477,320   

Diluted

       5,972,082           6,363,919           6,122,663           6,521,634   

Cash dividends declared per common share

     $ 0.47         $ 0.44         $ 1.82         $ 1.64   

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

  

Cost of sales

     $ 116         $ 88         $ 450         $ 350   

Research and development

     $ 314         $ 209         $ 1,216         $ 917   

Selling, general and administrative

     $ 332         $ 258         $ 1,197         $ 986   


Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

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

 

                                                 
       September 27,
2014
       September 28,
2013
 
ASSETS:   

Current assets:

         

Cash and cash equivalents

     $ 13,844         $ 14,259   

Short-term marketable securities

       11,233           26,287   

Accounts receivable, less allowances of $86 and $99, respectively

       17,460           13,102   

Inventories

       2,111           1,764   

Deferred tax assets

       4,318           3,453   

Vendor non-trade receivables

       9,759           7,539   

Other current assets

       9,806           6,882   
    

 

 

      

 

 

 

Total current assets

       68,531           73,286   

Long-term marketable securities

       130,162           106,215   

Property, plant and equipment, net

       20,624           16,597   

Goodwill

       4,616           1,577   

Acquired intangible assets, net

       4,142           4,179   

Other assets

       3,764           5,146   
    

 

 

      

 

 

 

Total assets

     $ 231,839         $ 207,000   
    

 

 

      

 

 

 
LIABILITIES AND SHAREHOLDERS’ EQUITY:   

Current liabilities:

         

Accounts payable

     $ 30,196         $ 22,367   

Accrued expenses

       18,453           13,856   

Deferred revenue

       8,491           7,435   

Commercial paper

       6,308           0   
    

 

 

      

 

 

 

Total current liabilities

       63,448           43,658   

Deferred revenue – non-current

       3,031           2,625   

Long-term debt

       28,987           16,960   

Other non-current liabilities

       24,826           20,208   
    

 

 

      

 

 

 

Total liabilities

       120,292           83,451   
    

 

 

      

 

 

 

Commitments and contingencies

         

Shareholders’ equity:

         

Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 5,866,161 and 6,294,494 shares issued and outstanding, respectively

       23,313           19,764   

Retained earnings

       87,152           104,256   

Accumulated other comprehensive income/(loss)

       1,082           (471
    

 

 

      

 

 

 

Total shareholders’ equity

       111,547           123,549   
    

 

 

      

 

 

 

Total liabilities and shareholders’ equity

     $ 231,839         $ 207,000   
    

 

 

      

 

 

 


Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

 

                                                 
     Twelve Months Ended  
     September 27,
2014
    September 28,
2013
 

Cash and cash equivalents, beginning of the year

   $ 14,259      $ 10,746   
  

 

 

   

 

 

 

Operating activities:

  

Net income

     39,510        37,037   

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

  

Depreciation and amortization

     7,946        6,757   

Share-based compensation expense

     2,863        2,253   

Deferred income tax expense

     2,347        1,141   

Changes in operating assets and liabilities:

  

Accounts receivable, net

     (4,232     (2,172

Inventories

     (76     (973

Vendor non-trade receivables

     (2,220     223   

Other current and non-current assets

     167        1,080   

Accounts payable

     5,938        2,340   

Deferred revenue

     1,460        1,459   

Other current and non-current liabilities

     6,010        4,521   
  

 

 

   

 

 

 

Cash generated by operating activities

     59,713        53,666   
  

 

 

   

 

 

 

Investing activities:

  

Purchases of marketable securities

     (217,128     (148,489

Proceeds from maturities of marketable securities

     18,810        20,317   

Proceeds from sales of marketable securities

     189,301        104,130   

Payments made in connection with business acquisitions, net

     (3,765     (496

Payments for acquisition of property, plant and equipment

     (9,571     (8,165

Payments for acquisition of intangible assets

     (242     (911

Other

     16        (160
  

 

 

   

 

 

 

Cash used in investing activities

     (22,579     (33,774
  

 

 

   

 

 

 

Financing activities:

  

Proceeds from issuance of common stock

     730        530   

Excess tax benefits from equity awards

     739        701   

Taxes paid related to net share settlement of equity awards

     (1,158     (1,082

Dividends and dividend equivalents paid

     (11,126     (10,564

Repurchase of common stock

     (45,000     (22,860

Proceeds from issuance of long-term debt, net

     11,960        16,896   

Proceeds from issuance of commercial paper, net

     6,306        0   
  

 

 

   

 

 

 

Cash used in financing activities

     (37,549     (16,379
  

 

 

   

 

 

 

Increase/(decrease) in cash and cash equivalents

     (415     3,513   
  

 

 

   

 

 

 

Cash and cash equivalents, end of the year

   $ 13,844      $ 14,259   
  

 

 

   

 

 

 

Supplemental cash flow disclosure:

  

Cash paid for income taxes, net

   $ 10,026      $ 9,128   

Cash paid for interest

   $ 339      $ 0   

Exhibit 99.2

Apple Inc.

Q4 2014 Unaudited Summary Data

(Units in thousands, Revenue in millions)

 

                                                                                                                                                                                             
     Q4’14      Q3’14      Q4’13      Sequential Change      Year/Year Change  
            Revenue             Revenue             Revenue             Revenue             Revenue  

Operating Segments

                               

Americas

      $ 16,247          $ 14,577          $ 13,941            11%            17%   

Europe

        9,535            8,091            8,005            18%            19%   

Greater China

        5,778            5,935            5,733            - 3%            1%   

Japan

        3,507            2,564            3,341            37%            5%   

Rest of Asia Pacific

        1,923            2,161            1,980            - 11%            - 3%   

Retail

        5,133            4,104            4,472            25%            15%   
     

 

 

       

 

 

       

 

 

       

 

 

       

 

 

 

Total Apple

      $ 42,123          $ 37,432          $ 37,472            13%            12%   
                                         
     Q4’14      Q3’14      Q4’13      Sequential Change      Year/Year Change  
     Units      Revenue      Units      Revenue      Units      Revenue      Units      Revenue      Units      Revenue  

Product Summary

                               

iPhone  (1)

     39,272       $ 23,678         35,203       $ 19,751         33,797       $ 19,510         12%         20%         16%         21%   

iPad  (1)

     12,316         5,316         13,276         5,889         14,079         6,186         - 7%         - 10%         - 13%         - 14%   

Mac  (1)

     5,520         6,625         4,413         5,540         4,574         5,624         25%         20%         21%         18%   

iPod  (1)

     2,641         410         2,926         442         3,498         573         - 10%         - 7%         - 24%         - 28%   

iTunes/Software/Services  (2)   

        4,608            4,485            4,260            3%            8%   

Accessories  (3)

        1,486            1,325            1,319            12%            13%   
     

 

 

       

 

 

       

 

 

       

 

 

       

 

 

 

Total Apple

            $ 42,123          $ 37,432          $ 37,472            13%            12%   

 

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

 

(2) Includes revenue from the iTunes Store, the App Store, the Mac App Store, the iBooks Store, AppleCare, licensing and other services.

 

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