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California
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94-2404110
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(State or other jurisdiction
of incorporation or organization)
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(I.R.S. Employer Identification No.)
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1 Infinite Loop
Cupertino, California
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95014
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Page
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Item 1.
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||
Item 2.
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||
Item 3.
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Item 4.
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||
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Item 1.
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||
Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 1.
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Financial Statements
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Three Months Ended
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|
Nine Months Ended
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||||||||||||
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June 25,
2016 |
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June 27,
2015 |
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June 25,
2016 |
|
June 27,
2015 |
||||||||
Net sales
|
$
|
42,358
|
|
|
$
|
49,605
|
|
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$
|
168,787
|
|
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$
|
182,214
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Cost of sales
|
26,252
|
|
|
29,924
|
|
|
102,337
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|
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109,136
|
|
||||
Gross margin
|
16,106
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19,681
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66,450
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73,078
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||||
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|
|
|
|
|
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research and development
|
2,560
|
|
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2,034
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7,475
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|
|
5,847
|
|
||||
Selling, general and administrative
|
3,441
|
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3,564
|
|
|
10,712
|
|
|
10,624
|
|
||||
Total operating expenses
|
6,001
|
|
|
5,598
|
|
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18,187
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|
|
16,471
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating income
|
10,105
|
|
|
14,083
|
|
|
48,263
|
|
|
56,607
|
|
||||
Other income/(expense), net
|
364
|
|
|
390
|
|
|
921
|
|
|
846
|
|
||||
Income before provision for income taxes
|
10,469
|
|
|
14,473
|
|
|
49,184
|
|
|
57,453
|
|
||||
Provision for income taxes
|
2,673
|
|
|
3,796
|
|
|
12,511
|
|
|
15,183
|
|
||||
Net income
|
$
|
7,796
|
|
|
$
|
10,677
|
|
|
$
|
36,673
|
|
|
$
|
42,270
|
|
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|
|
|
|
|
|
||||||||
Earnings per share:
|
|
|
|
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|
||||||||
Basic
|
$
|
1.43
|
|
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$
|
1.86
|
|
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$
|
6.66
|
|
|
$
|
7.30
|
|
Diluted
|
$
|
1.42
|
|
|
$
|
1.85
|
|
|
$
|
6.62
|
|
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$
|
7.25
|
|
|
|
|
|
|
|
|
|
||||||||
Shares used in computing earnings per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
5,443,058
|
|
|
5,729,886
|
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5,505,456
|
|
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5,788,922
|
|
||||
Diluted
|
5,472,781
|
|
|
5,773,099
|
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|
5,535,931
|
|
|
5,829,920
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Cash dividends declared per share
|
$
|
0.57
|
|
|
$
|
0.52
|
|
|
$
|
1.61
|
|
|
$
|
1.46
|
|
|
Three Months Ended
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|
Nine Months Ended
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||||||||||||
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June 25,
2016 |
|
June 27,
2015 |
|
June 25,
2016 |
|
June 27,
2015 |
||||||||
Net income
|
$
|
7,796
|
|
|
$
|
10,677
|
|
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$
|
36,673
|
|
|
$
|
42,270
|
|
Other comprehensive income/(loss):
|
|
|
|
|
|
|
|
||||||||
Change in foreign currency translation, net of tax
|
46
|
|
|
67
|
|
|
64
|
|
|
(179
|
)
|
||||
Change in unrealized gains/losses on derivative instruments:
|
|
|
|
|
|
|
|
||||||||
Change in fair value of derivatives, net of tax
|
(175
|
)
|
|
(64
|
)
|
|
(66
|
)
|
|
2,955
|
|
||||
Adjustment for net (gains)/losses realized and included in net income, net of tax
|
(88
|
)
|
|
(1,195
|
)
|
|
(1,061
|
)
|
|
(2,499
|
)
|
||||
Total change in unrealized gains/losses on derivative instruments, net of tax
|
(263
|
)
|
|
(1,259
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)
|
|
(1,127
|
)
|
|
456
|
|
||||
Change in unrealized gains/losses on marketable securities:
|
|
|
|
|
|
|
|
||||||||
Change in fair value of marketable securities, net of tax
|
1,170
|
|
|
(423
|
)
|
|
1,217
|
|
|
(286
|
)
|
||||
Adjustment for net (gains)/losses realized and included in net income, net of tax
|
(12
|
)
|
|
3
|
|
|
84
|
|
|
25
|
|
||||
Total change in unrealized gains/losses on marketable securities, net of tax
|
1,158
|
|
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(420
|
)
|
|
1,301
|
|
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(261
|
)
|
||||
Total other comprehensive income/(loss)
|
941
|
|
|
(1,612
|
)
|
|
238
|
|
|
16
|
|
||||
Total comprehensive income
|
$
|
8,737
|
|
|
$
|
9,065
|
|
|
$
|
36,911
|
|
|
$
|
42,286
|
|
|
June 25,
2016 |
|
September 26,
2015 |
||||
ASSETS:
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
18,237
|
|
|
$
|
21,120
|
|
Short-term marketable securities
|
43,519
|
|
|
20,481
|
|
||
Accounts receivable, less allowances of $55 and $63, respectively
|
11,714
|
|
|
16,849
|
|
||
Inventories
|
1,831
|
|
|
2,349
|
|
||
Vendor non-trade receivables
|
7,328
|
|
|
13,494
|
|
||
Other current assets
|
11,132
|
|
|
15,085
|
|
||
Total current assets
|
93,761
|
|
|
89,378
|
|
||
|
|
|
|
||||
Long-term marketable securities
|
169,764
|
|
|
164,065
|
|
||
Property, plant and equipment, net
|
25,448
|
|
|
22,471
|
|
||
Goodwill
|
5,261
|
|
|
5,116
|
|
||
Acquired intangible assets, net
|
3,506
|
|
|
3,893
|
|
||
Other non-current assets
|
7,862
|
|
|
5,556
|
|
||
Total assets
|
$
|
305,602
|
|
|
$
|
290,479
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY:
|
|||||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
26,318
|
|
|
$
|
35,490
|
|
Accrued expenses
|
20,820
|
|
|
25,181
|
|
||
Deferred revenue
|
8,352
|
|
|
8,940
|
|
||
Commercial paper
|
12,496
|
|
|
8,499
|
|
||
Current portion of long-term debt
|
3,500
|
|
|
2,500
|
|
||
Total current liabilities
|
71,486
|
|
|
80,610
|
|
||
|
|
|
|
||||
Deferred revenue, non-current
|
3,064
|
|
|
3,624
|
|
||
Long-term debt
|
68,939
|
|
|
53,463
|
|
||
Other non-current liabilities
|
35,572
|
|
|
33,427
|
|
||
Total liabilities
|
179,061
|
|
|
171,124
|
|
||
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
||||
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
||||
Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 5,393,165 and 5,578,753 shares issued and outstanding, respectively
|
30,106
|
|
|
27,416
|
|
||
Retained earnings
|
96,542
|
|
|
92,284
|
|
||
Accumulated other comprehensive income/(loss)
|
(107
|
)
|
|
(345
|
)
|
||
Total shareholders’ equity
|
126,541
|
|
|
119,355
|
|
||
Total liabilities and shareholders’ equity
|
$
|
305,602
|
|
|
$
|
290,479
|
|
|
Nine Months Ended
|
||||||
|
June 25,
2016 |
|
June 27,
2015 |
||||
Cash and cash equivalents, beginning of the period
|
$
|
21,120
|
|
|
$
|
13,844
|
|
|
|
|
|
||||
Operating activities:
|
|
|
|
||||
Net income
|
36,673
|
|
|
42,270
|
|
||
Adjustments to reconcile net income to cash generated by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
7,957
|
|
|
8,138
|
|
||
Share-based compensation expense
|
3,180
|
|
|
2,671
|
|
||
Deferred income tax expense
|
5,191
|
|
|
2,820
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable, net
|
5,135
|
|
|
7,090
|
|
||
Inventories
|
518
|
|
|
69
|
|
||
Vendor non-trade receivables
|
6,166
|
|
|
222
|
|
||
Other current and non-current assets
|
1,143
|
|
|
2,286
|
|
||
Accounts payable
|
(9,622
|
)
|
|
(3,263
|
)
|
||
Deferred revenue
|
(1,148
|
)
|
|
1,040
|
|
||
Other current and non-current liabilities
|
(5,495
|
)
|
|
4,448
|
|
||
Cash generated by operating activities
|
49,698
|
|
|
67,791
|
|
||
|
|
|
|
||||
Investing activities:
|
|
|
|
||||
Purchases of marketable securities
|
(112,068
|
)
|
|
(137,524
|
)
|
||
Proceeds from maturities of marketable securities
|
14,915
|
|
|
9,916
|
|
||
Proceeds from sales of marketable securities
|
69,926
|
|
|
80,635
|
|
||
Payments made in connection with business acquisitions, net
|
(146
|
)
|
|
(230
|
)
|
||
Payments for acquisition of property, plant and equipment
|
(8,757
|
)
|
|
(7,629
|
)
|
||
Payments for acquisition of intangible assets
|
(753
|
)
|
|
(201
|
)
|
||
Payments for strategic investments
|
(1,376
|
)
|
|
—
|
|
||
Other
|
(321
|
)
|
|
134
|
|
||
Cash used in investing activities
|
(38,580
|
)
|
|
(54,899
|
)
|
||
|
|
|
|
||||
Financing activities:
|
|
|
|
||||
Proceeds from issuance of common stock
|
247
|
|
|
324
|
|
||
Excess tax benefits from equity awards
|
391
|
|
|
684
|
|
||
Payments for taxes related to net share settlement of equity awards
|
(1,361
|
)
|
|
(1,332
|
)
|
||
Payments for dividends and dividend equivalents
|
(9,058
|
)
|
|
(8,597
|
)
|
||
Repurchases of common stock
|
(23,696
|
)
|
|
(22,000
|
)
|
||
Proceeds from issuance of term debt, net
|
17,984
|
|
|
21,312
|
|
||
Repayments of term debt
|
(2,500
|
)
|
|
—
|
|
||
Change in commercial paper, net
|
3,992
|
|
|
(1,808
|
)
|
||
Cash used in financing activities
|
(14,001
|
)
|
|
(11,417
|
)
|
||
|
|
|
|
||||
Increase/(decrease) in cash and cash equivalents
|
(2,883
|
)
|
|
1,475
|
|
||
Cash and cash equivalents, end of the period
|
$
|
18,237
|
|
|
$
|
15,319
|
|
|
|
|
|
||||
Supplemental cash flow disclosure:
|
|
|
|
||||
Cash paid for income taxes, net
|
$
|
8,990
|
|
|
$
|
10,604
|
|
Cash paid for interest
|
$
|
892
|
|
|
$
|
427
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 25,
2016 |
|
June 27,
2015 |
|
June 25,
2016 |
|
June 27,
2015 |
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
7,796
|
|
|
$
|
10,677
|
|
|
$
|
36,673
|
|
|
$
|
42,270
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding
|
5,443,058
|
|
|
5,729,886
|
|
|
5,505,456
|
|
|
5,788,922
|
|
||||
Effect of dilutive securities
|
29,723
|
|
|
43,213
|
|
|
30,475
|
|
|
40,998
|
|
||||
Weighted-average diluted shares
|
5,472,781
|
|
|
5,773,099
|
|
|
5,535,931
|
|
|
5,829,920
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share
|
$
|
1.43
|
|
|
$
|
1.86
|
|
|
$
|
6.66
|
|
|
$
|
7.30
|
|
Diluted earnings per share
|
$
|
1.42
|
|
|
$
|
1.85
|
|
|
$
|
6.62
|
|
|
$
|
7.25
|
|
|
June 25, 2016
|
||||||||||||||||||||||||||
|
Adjusted
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Cash and
Cash
Equivalents
|
|
Short-Term
Marketable
Securities
|
|
Long-Term
Marketable
Securities
|
||||||||||||||
Cash
|
$
|
9,118
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,118
|
|
|
$
|
9,118
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Level 1
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Money market funds
|
3,318
|
|
|
—
|
|
|
—
|
|
|
3,318
|
|
|
3,318
|
|
|
—
|
|
|
—
|
|
|||||||
Mutual funds
|
1,772
|
|
|
—
|
|
|
(185
|
)
|
|
1,587
|
|
|
—
|
|
|
1,587
|
|
|
—
|
|
|||||||
Subtotal
|
5,090
|
|
|
—
|
|
|
(185
|
)
|
|
4,905
|
|
|
3,318
|
|
|
1,587
|
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Level 2
(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. Treasury securities
|
45,583
|
|
|
416
|
|
|
(1
|
)
|
|
45,998
|
|
|
833
|
|
|
17,209
|
|
|
27,956
|
|
|||||||
U.S. agency securities
|
7,490
|
|
|
21
|
|
|
—
|
|
|
7,511
|
|
|
1,832
|
|
|
2,539
|
|
|
3,140
|
|
|||||||
Non-U.S. government securities
|
7,101
|
|
|
139
|
|
|
(63
|
)
|
|
7,177
|
|
|
50
|
|
|
685
|
|
|
6,442
|
|
|||||||
Certificates of deposit and time deposits
|
3,729
|
|
|
—
|
|
|
—
|
|
|
3,729
|
|
|
314
|
|
|
1,493
|
|
|
1,922
|
|
|||||||
Commercial paper
|
4,708
|
|
|
—
|
|
|
—
|
|
|
4,708
|
|
|
2,772
|
|
|
1,936
|
|
|
—
|
|
|||||||
Corporate securities
|
128,146
|
|
|
1,185
|
|
|
(433
|
)
|
|
128,898
|
|
|
—
|
|
|
17,883
|
|
|
111,015
|
|
|||||||
Municipal securities
|
952
|
|
|
9
|
|
|
—
|
|
|
961
|
|
|
—
|
|
|
127
|
|
|
834
|
|
|||||||
Mortgage- and asset-backed securities
|
18,333
|
|
|
207
|
|
|
(25
|
)
|
|
18,515
|
|
|
—
|
|
|
60
|
|
|
18,455
|
|
|||||||
Subtotal
|
216,042
|
|
|
1,977
|
|
|
(522
|
)
|
|
217,497
|
|
|
5,801
|
|
|
41,932
|
|
|
169,764
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total
|
$
|
230,250
|
|
|
$
|
1,977
|
|
|
$
|
(707
|
)
|
|
$
|
231,520
|
|
|
$
|
18,237
|
|
|
$
|
43,519
|
|
|
$
|
169,764
|
|
|
September 26, 2015
|
||||||||||||||||||||||||||
|
Adjusted
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Cash and
Cash
Equivalents
|
|
Short-Term
Marketable
Securities
|
|
Long-Term
Marketable
Securities
|
||||||||||||||
Cash
|
$
|
11,389
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,389
|
|
|
$
|
11,389
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Level 1
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Money market funds
|
1,798
|
|
|
—
|
|
|
—
|
|
|
1,798
|
|
|
1,798
|
|
|
—
|
|
|
—
|
|
|||||||
Mutual funds
|
1,772
|
|
|
—
|
|
|
(144
|
)
|
|
1,628
|
|
|
—
|
|
|
1,628
|
|
|
—
|
|
|||||||
Subtotal
|
3,570
|
|
|
—
|
|
|
(144
|
)
|
|
3,426
|
|
|
1,798
|
|
|
1,628
|
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Level 2
(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. Treasury securities
|
34,902
|
|
|
181
|
|
|
(1
|
)
|
|
35,082
|
|
|
—
|
|
|
3,498
|
|
|
31,584
|
|
|||||||
U.S. agency securities
|
5,864
|
|
|
14
|
|
|
—
|
|
|
5,878
|
|
|
841
|
|
|
767
|
|
|
4,270
|
|
|||||||
Non-U.S. government securities
|
6,356
|
|
|
45
|
|
|
(167
|
)
|
|
6,234
|
|
|
43
|
|
|
135
|
|
|
6,056
|
|
|||||||
Certificates of deposit and time deposits
|
4,347
|
|
|
—
|
|
|
—
|
|
|
4,347
|
|
|
2,065
|
|
|
1,405
|
|
|
877
|
|
|||||||
Commercial paper
|
6,016
|
|
|
—
|
|
|
—
|
|
|
6,016
|
|
|
4,981
|
|
|
1,035
|
|
|
—
|
|
|||||||
Corporate securities
|
116,908
|
|
|
242
|
|
|
(985
|
)
|
|
116,165
|
|
|
3
|
|
|
11,948
|
|
|
104,214
|
|
|||||||
Municipal securities
|
947
|
|
|
5
|
|
|
—
|
|
|
952
|
|
|
—
|
|
|
48
|
|
|
904
|
|
|||||||
Mortgage- and asset-backed securities
|
16,121
|
|
|
87
|
|
|
(31
|
)
|
|
16,177
|
|
|
—
|
|
|
17
|
|
|
16,160
|
|
|||||||
Subtotal
|
191,461
|
|
|
574
|
|
|
(1,184
|
)
|
|
190,851
|
|
|
7,933
|
|
|
18,853
|
|
|
164,065
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total
|
$
|
206,420
|
|
|
$
|
574
|
|
|
$
|
(1,328
|
)
|
|
$
|
205,666
|
|
|
$
|
21,120
|
|
|
$
|
20,481
|
|
|
$
|
164,065
|
|
(1)
|
The fair value of Level 1 securities is estimated based on quoted prices in active markets for identical assets or liabilities.
|
(2)
|
The fair value of Level 2 securities is estimated based on observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
|
June 25, 2016
|
||||||||||
|
Fair Value of
Derivatives Designated
as Hedge Instruments
|
|
Fair Value of
Derivatives Not Designated
as Hedge Instruments
|
|
Total
Fair Value
|
||||||
Derivative assets
(1)
:
|
|
|
|
|
|
||||||
Foreign exchange contracts
|
$
|
391
|
|
|
$
|
115
|
|
|
$
|
506
|
|
Interest rate contracts
|
$
|
860
|
|
|
$
|
—
|
|
|
$
|
860
|
|
|
|
|
|
|
|
||||||
Derivative liabilities
(2)
:
|
|
|
|
|
|
||||||
Foreign exchange contracts
|
$
|
903
|
|
|
$
|
281
|
|
|
$
|
1,184
|
|
Interest rate contracts
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
September 26, 2015
|
||||||||||
|
Fair Value of
Derivatives Designated
as Hedge Instruments
|
|
Fair Value of
Derivatives Not Designated
as Hedge Instruments
|
|
Total
Fair Value
|
||||||
Derivative assets
(1)
:
|
|
|
|
|
|
||||||
Foreign exchange contracts
|
$
|
1,442
|
|
|
$
|
109
|
|
|
$
|
1,551
|
|
Interest rate contracts
|
$
|
394
|
|
|
$
|
—
|
|
|
$
|
394
|
|
|
|
|
|
|
|
||||||
Derivative liabilities
(2)
:
|
|
|
|
|
|
||||||
Foreign exchange contracts
|
$
|
905
|
|
|
$
|
94
|
|
|
$
|
999
|
|
Interest rate contracts
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
13
|
|
(1)
|
The fair value of derivative assets is measured using Level 2 fair value inputs and is recorded as other current assets in the Condensed Consolidated Balance Sheets.
|
(2)
|
The fair value of derivative liabilities is measured using Level 2 fair value inputs and is recorded as accrued expenses in the Condensed Consolidated Balance Sheets.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 25,
2016 |
|
June 27,
2015 |
|
June 25,
2016 |
|
June 27,
2015 |
||||||||
Gains/(Losses) recognized in OCI – effective portion:
|
|
|
|
|
|
|
|
||||||||
Cash flow hedges:
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
$
|
(170
|
)
|
|
$
|
(34
|
)
|
|
$
|
18
|
|
|
$
|
3,716
|
|
Interest rate contracts
|
(11
|
)
|
|
1
|
|
|
(53
|
)
|
|
(90
|
)
|
||||
Total
|
$
|
(181
|
)
|
|
$
|
(33
|
)
|
|
$
|
(35
|
)
|
|
$
|
3,626
|
|
|
|
|
|
|
|
|
|
||||||||
Net investment hedges:
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
$
|
—
|
|
|
$
|
55
|
|
|
$
|
—
|
|
|
$
|
167
|
|
Foreign currency debt
|
(128
|
)
|
|
(6
|
)
|
|
(205
|
)
|
|
(6
|
)
|
||||
Total
|
$
|
(128
|
)
|
|
$
|
49
|
|
|
$
|
(205
|
)
|
|
$
|
161
|
|
|
|
|
|
|
|
|
|
||||||||
Gains/(Losses) reclassified from AOCI into net income – effective portion:
|
|
|
|
|
|
|
|
||||||||
Cash flow hedges:
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
$
|
142
|
|
|
$
|
1,420
|
|
|
$
|
1,325
|
|
|
$
|
2,905
|
|
Interest rate contracts
|
(3
|
)
|
|
(4
|
)
|
|
(10
|
)
|
|
(13
|
)
|
||||
Total
|
$
|
139
|
|
|
$
|
1,416
|
|
|
$
|
1,315
|
|
|
$
|
2,892
|
|
|
|
|
|
|
|
|
|
||||||||
Gains/(Losses) on derivative instruments:
|
|
|
|
|
|
|
|
||||||||
Fair value hedges:
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
$
|
345
|
|
|
$
|
(254
|
)
|
|
$
|
484
|
|
|
$
|
(15
|
)
|
|
|
|
|
|
|
|
|
||||||||
Gains/(Losses) related to hedged items:
|
|
|
|
|
|
|
|
||||||||
Fair value hedges:
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
$
|
(345
|
)
|
|
$
|
254
|
|
|
$
|
(484
|
)
|
|
$
|
15
|
|
|
June 25, 2016
|
|
September 26, 2015
|
||||||||||||
|
Notional
Amount
|
|
Credit Risk
Amount
|
|
Notional
Amount
|
|
Credit Risk
Amount
|
||||||||
Instruments designated as accounting hedges:
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
$
|
37,843
|
|
|
$
|
391
|
|
|
$
|
70,054
|
|
|
$
|
1,385
|
|
Interest rate contracts
|
$
|
23,050
|
|
|
$
|
860
|
|
|
$
|
18,750
|
|
|
$
|
394
|
|
|
|
|
|
|
|
|
|
||||||||
Instruments not designated as accounting hedges:
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
$
|
38,764
|
|
|
$
|
115
|
|
|
$
|
49,190
|
|
|
$
|
109
|
|
|
June 25,
2016 |
|
September 26,
2015 |
||||
Land and buildings
|
$
|
9,108
|
|
|
$
|
6,956
|
|
Machinery, equipment and internal-use software
|
42,550
|
|
|
37,038
|
|
||
Leasehold improvements
|
6,333
|
|
|
5,263
|
|
||
Gross property, plant and equipment
|
57,991
|
|
|
49,257
|
|
||
Accumulated depreciation and amortization
|
(32,543
|
)
|
|
(26,786
|
)
|
||
Total property, plant and equipment, net
|
$
|
25,448
|
|
|
$
|
22,471
|
|
|
June 25,
2016 |
|
September 26,
2015 |
||||
Deferred tax liabilities
|
$
|
24,560
|
|
|
$
|
24,062
|
|
Other non-current liabilities
|
11,012
|
|
|
9,365
|
|
||
Total other non-current liabilities
|
$
|
35,572
|
|
|
$
|
33,427
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 25,
2016 |
|
June 27,
2015 |
|
June 25,
2016 |
|
June 27,
2015 |
||||||||
Interest and dividend income
|
$
|
1,036
|
|
|
$
|
766
|
|
|
$
|
2,963
|
|
|
$
|
2,095
|
|
Interest expense
|
(409
|
)
|
|
(201
|
)
|
|
(1,006
|
)
|
|
(495
|
)
|
||||
Other expense, net
|
(263
|
)
|
|
(175
|
)
|
|
(1,036
|
)
|
|
(754
|
)
|
||||
Total other income/(expense), net
|
$
|
364
|
|
|
$
|
390
|
|
|
$
|
921
|
|
|
$
|
846
|
|
|
June 25, 2016
|
|
September 26, 2015
|
||||||||||||||||||||
|
Gross
Carrying Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying Amount
|
|
Gross
Carrying Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying Amount
|
||||||||||||
Definite-lived and amortizable acquired intangible assets
|
$
|
8,817
|
|
|
$
|
(5,411
|
)
|
|
$
|
3,406
|
|
|
$
|
8,125
|
|
|
$
|
(4,332
|
)
|
|
$
|
3,793
|
|
Indefinite-lived and non-amortizable acquired intangible assets
|
100
|
|
|
—
|
|
|
100
|
|
|
100
|
|
|
—
|
|
|
100
|
|
||||||
Total acquired intangible assets
|
$
|
8,917
|
|
|
$
|
(5,411
|
)
|
|
$
|
3,506
|
|
|
$
|
8,225
|
|
|
$
|
(4,332
|
)
|
|
$
|
3,893
|
|
|
Nine Months Ended
|
||||||
|
June 25,
2016 |
|
June 27,
2015 |
||||
Maturities less than 90 days:
|
|
|
|
||||
Proceeds from (repayments of) commercial paper, net
|
$
|
4,154
|
|
|
$
|
579
|
|
|
|
|
|
||||
Maturities greater than 90 days:
|
|
|
|
||||
Proceeds from commercial paper
|
1,846
|
|
|
2,601
|
|
||
Repayments of commercial paper
|
(2,008
|
)
|
|
(4,988
|
)
|
||
Proceeds from (repayments of) commercial paper, net
|
(162
|
)
|
|
(2,387
|
)
|
||
|
|
|
|
||||
Total change in commercial paper, net
|
$
|
3,992
|
|
|
$
|
(1,808
|
)
|
|
Maturities
|
|
June 25, 2016
|
|
September 26, 2015
|
||||||||||
|
Amount
(in millions)
|
|
Effective
Interest Rate
|
|
Amount
(in millions)
|
|
Effective
Interest Rate
|
||||||||
2013 debt issuance of $17.0 billion:
|
|
|
|
|
|
|
|
|
|
||||||
Floating-rate notes
|
2018
|
|
$
|
2,000
|
|
|
1.10%
|
|
|
$
|
3,000
|
|
|
0.51% - 1.10%
|
|
Fixed-rate 1.00% - 3.85% notes
|
2018 - 2043
|
|
12,500
|
|
|
1.08% - 3.91%
|
|
|
14,000
|
|
|
0.51% - 3.91%
|
|
||
|
|
|
|
|
|
|
|
|
|
||||||
2014 debt issuance of $12.0 billion:
|
|
|
|
|
|
|
|
|
|
||||||
Floating-rate notes
|
2017 - 2019
|
|
2,000
|
|
|
0.70% - 0.93%
|
|
|
2,000
|
|
|
0.37% - 0.60%
|
|
||
Fixed-rate 1.05% - 4.45% notes
|
2017 - 2044
|
|
10,000
|
|
|
0.70% - 4.48%
|
|
|
10,000
|
|
|
0.37% - 4.48%
|
|
||
|
|
|
|
|
|
|
|
|
|
||||||
2015 debt issuances of $27.3 billion:
|
|
|
|
|
|
|
|
|
|
||||||
Floating-rate notes
|
2017 - 2020
|
|
1,774
|
|
|
0.68% - 1.87%
|
|
|
1,743
|
|
|
0.36% - 1.87%
|
|
||
Fixed-rate 0.35% - 4.375% notes
|
2017 - 2045
|
|
25,347
|
|
|
0.28% - 4.51%
|
|
|
24,958
|
|
|
0.28% - 4.51%
|
|
||
|
|
|
|
|
|
|
|
|
|
||||||
Second quarter 2016 debt issuance of $15.5 billion:
|
|
|
|
|
|
|
|
|
|
||||||
Floating-rate notes
|
2019
|
|
500
|
|
|
1.47
|
%
|
|
—
|
|
|
—
|
|
||
Floating-rate notes
|
2021
|
|
500
|
|
|
1.78
|
%
|
|
—
|
|
|
—
|
|
||
Fixed-rate 1.30% notes
|
2018
|
|
500
|
|
|
1.32
|
%
|
|
—
|
|
|
—
|
|
||
Fixed-rate 1.70% notes
|
2019
|
|
1,000
|
|
|
1.71
|
%
|
|
—
|
|
|
—
|
|
||
Fixed-rate 2.25% notes
|
2021
|
|
3,000
|
|
|
1.80
|
%
|
|
—
|
|
|
—
|
|
||
Fixed-rate 2.85% notes
|
2023
|
|
1,500
|
|
|
2.50
|
%
|
|
—
|
|
|
—
|
|
||
Fixed-rate 3.25% notes
|
2026
|
|
3,250
|
|
|
2.40
|
%
|
|
—
|
|
|
—
|
|
||
Fixed-rate 4.50% notes
|
2036
|
|
1,250
|
|
|
4.54
|
%
|
|
—
|
|
|
—
|
|
||
Fixed-rate 4.65% notes
|
2046
|
|
4,000
|
|
|
4.58
|
%
|
|
—
|
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|
|
||||||
Third quarter 2016 Australian dollar-denominated debt issuance of A$1.4 billion:
|
|
|
|
|
|
|
|
|
|
||||||
Fixed-rate 2.65% notes
|
2020
|
|
487
|
|
|
1.92
|
%
|
|
—
|
|
|
—
|
|
||
Fixed-rate 3.35% notes
|
2024
|
|
337
|
|
|
2.61
|
%
|
|
—
|
|
|
—
|
|
||
Fixed-rate 3.60% notes
|
2026
|
|
243
|
|
|
2.84
|
%
|
|
—
|
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|
|
||||||
Third quarter 2016 debt issuance of $1.4 billion:
|
|
|
|
|
|
|
|
|
|
||||||
Fixed-rate 4.15% notes
|
2046
|
|
1,377
|
|
|
4.15
|
%
|
|
—
|
|
|
—
|
|
||
Total term debt
|
|
|
71,565
|
|
|
|
|
55,701
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||
Unamortized premium/(discount)
|
|
|
14
|
|
|
|
|
(114
|
)
|
|
|
||||
Hedge accounting fair value adjustments
|
|
|
860
|
|
|
|
|
376
|
|
|
|
||||
Less: Current portion of long-term debt
|
|
|
(3,500
|
)
|
|
|
|
(2,500
|
)
|
|
|
||||
Total long-term debt
|
|
|
$
|
68,939
|
|
|
|
|
$
|
53,463
|
|
|
|
|
Dividends
Per Share
|
|
Amount
(in millions)
|
||||
2016:
|
|
|
|
||||
Third quarter
|
$
|
0.57
|
|
|
$
|
3,117
|
|
Second quarter
|
0.52
|
|
|
2,879
|
|
||
First quarter
|
0.52
|
|
|
2,898
|
|
||
Total cash dividends declared and paid
|
$
|
1.61
|
|
|
$
|
8,894
|
|
|
|
|
|
||||
2015:
|
|
|
|
||||
Fourth quarter
|
$
|
0.52
|
|
|
$
|
2,950
|
|
Third quarter
|
0.52
|
|
|
2,997
|
|
||
Second quarter
|
0.47
|
|
|
2,734
|
|
||
First quarter
|
0.47
|
|
|
2,750
|
|
||
Total cash dividends declared and paid
|
$
|
1.98
|
|
|
$
|
11,431
|
|
|
Purchase Period
End Date
|
|
Number of Shares
(in thousands)
|
|
Average Repurchase
Price Per Share
|
|
ASR Amount
(in millions)
|
|||||
May 2016 ASR
|
August 2016
|
|
48,183
|
|
(1)
|
(1)
|
|
|
$
|
6,000
|
|
|
November 2015 ASR
|
April 2016
|
|
29,122
|
|
(2)
|
$
|
103.02
|
|
|
$
|
3,000
|
|
May 2015 ASR
|
July 2015
|
|
48,293
|
|
|
$
|
124.24
|
|
|
$
|
6,000
|
|
August 2014 ASR
|
February 2015
|
|
81,525
|
|
|
$
|
110.40
|
|
|
$
|
9,000
|
|
January 2014 ASR
|
December 2014
|
|
134,247
|
|
|
$
|
89.39
|
|
|
$
|
12,000
|
|
(1)
|
“Number of Shares” represents those shares delivered in the beginning of the purchase period and does not represent the final number of shares to be delivered under the ASR. The total number of shares ultimately delivered, and therefore the average repurchase price paid per share, will be determined at the end of the applicable purchase period based on the volume-weighted average price of the Company’s common stock during that period. The May 2016 ASR purchase period will end in or before August 2016.
|
(2)
|
Includes
20.4 million
shares delivered and retired at the beginning of the purchase period, which began in the first quarter of 2016 and
8.7 million
shares delivered and retired at the end of the purchase period, which concluded in the third quarter of 2016.
|
|
Number of Shares
(in thousands)
|
|
Average Repurchase
Price Per Share
|
|
Amount
(in millions)
|
|||||
2016:
|
|
|
|
|
|
|||||
Third quarter
|
41,238
|
|
|
$
|
97.00
|
|
|
$
|
4,000
|
|
Second quarter
|
71,766
|
|
|
$
|
97.54
|
|
|
7,000
|
|
|
First quarter
|
25,984
|
|
|
$
|
115.45
|
|
|
3,000
|
|
|
Total open market common stock repurchases
|
138,988
|
|
|
|
|
$
|
14,000
|
|
||
|
|
|
|
|
|
|||||
2015:
|
|
|
|
|
|
|||||
Fourth quarter
|
121,802
|
|
|
$
|
115.15
|
|
|
$
|
14,026
|
|
Third quarter
|
31,231
|
|
|
$
|
128.08
|
|
|
4,000
|
|
|
Second quarter
|
56,400
|
|
|
$
|
124.11
|
|
|
7,000
|
|
|
First quarter
|
45,704
|
|
|
$
|
109.40
|
|
|
5,000
|
|
|
Total open market common stock repurchases
|
255,137
|
|
|
|
|
$
|
30,026
|
|
|
Cumulative Foreign
Currency Translation
|
|
Unrealized Gains/Losses
on Derivative Instruments
|
|
Unrealized Gains/Losses
on Marketable Securities
|
|
Total
|
||||||||
Balance at September 26, 2015
|
$
|
(653
|
)
|
|
$
|
772
|
|
|
$
|
(464
|
)
|
|
$
|
(345
|
)
|
Other comprehensive income/(loss) before reclassifications
|
62
|
|
|
(56
|
)
|
|
1,880
|
|
|
1,886
|
|
||||
Amounts reclassified from AOCI
|
—
|
|
|
(1,317
|
)
|
|
129
|
|
|
(1,188
|
)
|
||||
Tax effect
|
2
|
|
|
246
|
|
|
(708
|
)
|
|
(460
|
)
|
||||
Other comprehensive income/(loss)
|
64
|
|
|
(1,127
|
)
|
|
1,301
|
|
|
238
|
|
||||
Balance at June 25, 2016
|
$
|
(589
|
)
|
|
$
|
(355
|
)
|
|
$
|
837
|
|
|
$
|
(107
|
)
|
|
Number of RSUs
(in thousands)
|
|
Weighted-Average Grant Date
Fair Value Per Share
|
|
Aggregate Intrinsic Value
(in millions)
|
|||||
Balance at September 26, 2015
|
101,467
|
|
|
$
|
85.77
|
|
|
|
||
RSUs granted
|
47,100
|
|
|
$
|
109.67
|
|
|
|
||
RSUs vested
|
(41,326
|
)
|
|
$
|
84.86
|
|
|
|
||
RSUs cancelled
|
(4,250
|
)
|
|
$
|
95.44
|
|
|
|
||
Balance at June 25, 2016
|
102,991
|
|
|
$
|
96.57
|
|
|
$
|
9,619
|
|