Apple
APPLE INC (Form: 8-K, Received: 04/26/2016 16:33:18)

 

 

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 26, 2016

Date of Report (Date of earliest event reported)

 

 

 

 

LOGO

Apple Inc.

(Exact name of Registrant as specified in its charter)

 

California   001-36743   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)

(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 26, 2016, Apple Inc. (“Apple”) issued a press release regarding Apple’s financial results for its second fiscal quarter ended March 26, 2016 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

  

Exhibit Description

99.1    Press release issued by Apple Inc. on April 26, 2016.
99.2    Data sheet issued by Apple Inc. on April 26, 2016.


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.

 

Date: April 26, 2016     Apple Inc.
    By:   /s/ Luca Maestri
     

Luca Maestri

Senior Vice President,

Chief Financial Officer


Exhibit Index

 

Exhibit

Number

  

Exhibit Description

99.1    Press release issued by Apple Inc. on April 26, 2016.
99.2    Data sheet issued by Apple Inc. on April 26, 2016.

Exhibit 99.1

Apple Reports Second Quarter Results

Capital Return Program Expanding to $250 Billion

CUPERTINO, California — April 26, 2016 — Apple ® today announced financial results for its fiscal 2016 second quarter ended March 26, 2016. The Company posted quarterly revenue of $50.6 billion and quarterly net income of $10.5 billion, or $1.90 per diluted share. These results compare to revenue of $58 billion and net income of $13.6 billion, or $2.33 per diluted share, in the year-ago quarter. Gross margin was 39.4 percent compared to 40.8 percent in the year-ago quarter. International sales accounted for 67 percent of the quarter’s revenue.

“Our team executed extremely well in the face of strong macroeconomic headwinds,” said Tim Cook, Apple’s CEO. “We are very happy with the continued strong growth in revenue from Services, thanks to the incredible strength of the Apple ecosystem and our growing base of over one billion active devices.”

The Company also announced that its Board of Directors has authorized an increase of $50 billion to the Company’s program to return capital to shareholders. Under the expanded program, Apple plans to spend a cumulative total of $250 billion of cash by the end of March 2018.

“We generated strong operating cash flow of $11.6 billion and returned $10 billion to shareholders through our capital return program during the March quarter,” said Luca Maestri, Apple’s CFO. “Thanks to the strength of our business results, we are happy to be announcing today a further increase of the program to $250 billion.”

As part of the updated program, the Board has increased its share repurchase authorization to $175 billion from the $140 billion level announced last year. The Company also expects to continue to net-share-settle vesting restricted stock units.

The Board has approved an increase of 10 percent to the Company’s quarterly dividend, and has declared a dividend of $.57 per share, payable on May 12, 2016 to shareholders of record as of the close of business on May 9, 2016.

From the inception of its capital return program in August 2012 through March 2016, Apple has returned over $163 billion to shareholders, including $117 billion in share repurchases.

The Company plans to continue to access the domestic and international debt markets to assist in funding the program. The management team and the Board will continue to review each element of the capital return program regularly and plan to provide an update on the program on an annual basis.

Apple is providing the following guidance for its fiscal 2016 third quarter:

 

 

revenue between $41 billion and $43 billion

 

 

gross margin between 37.5 percent and 38 percent

 

 

operating expenses between $6 billion and $6.1 billion

 

 

other income/(expense) of $300 million

 

 

tax rate of 25.5 percent

Apple will provide live streaming of its Q2 2016 financial results conference call beginning at 2:00 p.m. PDT on April 26, 2016 at www.apple.com/investor/earnings-call/ . 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), tax rate, and plans for dividends, share repurchases and public debt issuance. 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 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 26, 2015, its Form 10-Q for the fiscal quarter ended December 26, 2015, and its Form 10-Q for the fiscal quarter ended March 26, 2016 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 revolutionized personal technology with the introduction of the Macintosh in 1984. Today, Apple leads the world in innovation with iPhone, iPad, Mac, Apple Watch and Apple TV. Apple’s four software platforms — iOS, OS X, watchOS and tvOS — provide seamless experiences across all Apple devices and empower people with breakthrough services including the App Store, Apple Music, Apple Pay and iCloud. Apple’s 100,000 employees are dedicated to making the best products on earth, and to leaving the world better than we found it.

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.

© 2016 Apple Inc. All rights reserved. Apple and the Apple logo 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 26,
2016
     March 28,
2015
     March 26,
2016
     March 28,
2015
 

Net sales

   $ 50,557       $ 58,010       $ 126,429       $ 132,609   

Cost of sales (1)

     30,636         34,354         76,085         79,212   
  

 

 

    

 

 

    

 

 

    

 

 

 

Gross margin

     19,921         23,656         50,344         53,397   
  

 

 

    

 

 

    

 

 

    

 

 

 

Operating expenses:

           

Research and development (1)

     2,511         1,918         4,915         3,813   

Selling, general and administrative (1)

     3,423         3,460         7,271         7,060   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total operating expenses

     5,934         5,378         12,186         10,873   
  

 

 

    

 

 

    

 

 

    

 

 

 

Operating income

     13,987         18,278         38,158         42,524   

Other income/(expense), net

     155         286         557         456   
  

 

 

    

 

 

    

 

 

    

 

 

 

Income before provision for income taxes

     14,142         18,564         38,715         42,980   

Provision for income taxes

     3,626         4,995         9,838         11,387   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income

   $ 10,516       $ 13,569       $ 28,877       $ 31,593   
  

 

 

    

 

 

    

 

 

    

 

 

 

Earnings per share:

           

Basic

   $ 1.91       $ 2.34       $ 5.22       $ 5.43   

Diluted

   $ 1.90       $ 2.33       $ 5.19       $ 5.39   

Shares used in computing earnings per share:

           

Basic

     5,514,381         5,793,799         5,536,656         5,818,441   

Diluted

     5,540,886         5,834,858         5,567,506         5,858,330   

Cash dividends declared per share

   $ 0.52       $ 0.47       $ 1.04       $ 0.94   
(1)  Includes share-based compensation expense as follows:   

Cost of sales

   $ 191       $ 142       $ 395       $ 282   

Research and development

   $ 468       $ 384       $ 934       $ 758   

Selling, general and administrative

   $ 389       $ 401       $ 797       $ 775   


Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

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

 

                                                 
     March 26,
2016
    September 26,
2015
 
ASSETS:   

Current assets:

    

Cash and cash equivalents

   $ 21,514      $ 21,120   

Short-term marketable securities

     33,769        20,481   

Accounts receivable, less allowances of $60 and $63, respectively

     12,229        16,849   

Inventories

     2,281        2,349   

Vendor non-trade receivables

     7,595        13,494   

Other current assets

     10,204        15,085   
  

 

 

   

 

 

 

Total current assets

     87,592        89,378   

Long-term marketable securities

     177,645        164,065   

Property, plant and equipment, net

     23,203        22,471   

Goodwill

     5,249        5,116   

Acquired intangible assets, net

     3,843        3,893   

Other non-current assets

     7,745        5,556   
  

 

 

   

 

 

 

Total assets

   $ 305,277      $ 290,479   
  

 

 

   

 

 

 
LIABILITIES AND SHAREHOLDERS’ EQUITY:   

Current liabilities:

    

Accounts payable

   $ 25,098      $ 35,490   

Accrued expenses

     23,208        25,181   

Deferred revenue

     9,461        8,940   

Commercial paper

     7,998        8,499   

Current portion of long-term debt

     2,500        2,500   
  

 

 

   

 

 

 

Total current liabilities

     68,265        80,610   

Deferred revenue, non-current

     3,322        3,624   

Long-term debt

     69,374        53,463   

Other non-current liabilities

     33,859        33,427   
  

 

 

   

 

 

 

Total liabilities

     174,820        171,124   
  

 

 

   

 

 

 

Commitments and contingencies

    

Shareholders’ equity:

    

Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 5,478,446 and 5,578,753 shares issued and outstanding, respectively

     29,484        27,416   

Retained earnings

     102,021        92,284   

Accumulated other comprehensive income/(loss)

     (1,048     (345
  

 

 

   

 

 

 

Total shareholders’ equity

     130,457        119,355   
  

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 305,277      $ 290,479   
  

 

 

   

 

 

 


Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

 

                                                 
     Six Months Ended  
     March 26,
2016
     March 28,
2015
 

Cash and cash equivalents, beginning of the period

   $ 21,120       $ 13,844   
  

 

 

    

 

 

 

Operating activities:

  

Net income

     28,877         31,593   

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

  

Depreciation and amortization

     5,431         5,054   

Share-based compensation expense

     2,126         1,815   

Deferred income tax expense

     3,092         1,879   

Changes in operating assets and liabilities:

  

Accounts receivable, net

     4,620         6,555   

Inventories

     68         (285

Vendor non-trade receivables

     5,899         2,500   

Other current and non-current assets

     300         2,448   

Accounts payable

     (9,475      (5,428

Deferred revenue

     219         993   

Other current and non-current liabilities

     (2,093      5,679   
  

 

 

    

 

 

 

Cash generated by operating activities

     39,064         52,803   
  

 

 

    

 

 

 

Investing activities:

  

Purchases of marketable securities

     (86,242      (92,523

Proceeds from maturities of marketable securities

     9,148         5,871   

Proceeds from sales of marketable securities

     50,051         48,924   

Payments made in connection with business acquisitions, net

     (140      (115

Payments for acquisition of property, plant and equipment

     (5,948      (5,586

Payments for acquisition of intangible assets

     (657      (155

Other

     (322      88   
  

 

 

    

 

 

 

Cash used in investing activities

     (34,110      (43,496
  

 

 

    

 

 

 

Financing activities:

  

Proceeds from issuance of common stock

     247         309   

Excess tax benefits from equity awards

     264         357   

Payments for taxes related to net share settlement of equity awards

     (751      (608

Payments for dividends and dividend equivalents

     (5,871      (5,544

Repurchase of common stock

     (13,530      (12,000

Proceeds from issuance of term debt, net

     15,584         11,332   

Change in commercial paper, net

     (503      (2,508
  

 

 

    

 

 

 

Cash used in financing activities

     (4,560      (8,662
  

 

 

    

 

 

 

Increase in cash and cash equivalents

     394         645   
  

 

 

    

 

 

 

Cash and cash equivalents, end of the period

   $ 21,514       $ 14,489   
  

 

 

    

 

 

 

Supplemental cash flow disclosure:

  

Cash paid for income taxes, net

   $ 6,630       $ 7,058   

Cash paid for interest

   $ 565       $ 220   

Exhibit 99.2

Apple Inc.

Q2 2016 Unaudited Summary Data

(Units in thousands, Revenue in millions)

 

                                                                                                                                                                                             
    Q2 2016     Q1 2016     Q2 2015     Sequential Change     Year/Year Change  
          Revenue           Revenue           Revenue           Revenue           Revenue  

Operating Segments

                     

Americas

    $ 19,096        $ 29,325        $ 21,316          - 35%          - 10%   

Europe

      11,535          17,932          12,204          - 36%          - 5%   

Greater China

      12,486          18,373          16,823          - 32%          - 26%   

Japan

      4,281          4,794          3,457          - 11%          24%   

Rest of Asia Pacific

      3,159          5,448          4,210          - 42%          - 25%   
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Total Apple

    $ 50,557        $ 75,872        $ 58,010          - 33%          - 13%   
   

 

 

     

 

 

     

 

 

         
                               
    Q2 2016     Q1 2016     Q2 2015     Sequential Change     Year/Year Change  
    Units     Revenue     Units     Revenue     Units     Revenue     Units     Revenue     Units     Revenue  

Product Summary

                     

iPhone (1)

    51,193      $ 32,857        74,779      $ 51,635        61,170      $ 40,282        - 32%        - 36%        - 16%        - 18%   

iPad (1)

    10,251        4,413        16,122        7,084        12,623        5,428        - 36%        - 38%        - 19%        - 19%   

Mac (1)

    4,034        5,107        5,312        6,746        4,563        5,615        - 24%        - 24%        - 12%        - 9%   

Services (2)

      5,991          6,056          4,996          - 1%          20%   

Other Products (1)(3)

      2,189          4,351          1,689          - 50%          30%   
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Total Apple

    $ 50,557        $ 75,872        $ 58,010          - 33%          - 13%   
   

 

 

     

 

 

     

 

 

         
         

 

 

                             

 

(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.