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APPLE INC (Form: 8-K, Received: 05/02/2017 16:34:03)


 
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
May 2, 2017
Date of Report (Date of earliest event reported)
 
 
G325078G0426062022046A02.JPG  
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))
Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 




Item 2.02
Results of Operations and Financial Condition.
On May 2, 2017 , Apple Inc. (“Apple”) issued a press release regarding Apple’s financial results for its second fiscal quarter ended April 1, 2017 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 May 2, 2017.
 
 
99.2
  
Data sheet issued by Apple Inc. on May 2, 2017.





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:
May 2, 2017
 
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 May 2, 2017.
 
 
99.2
  
Data sheet issued by Apple Inc. on May 2, 2017.






Exhibit 99.1


Apple Reports Second Quarter Results

Capital Return Program Expanding to $300 Billion


CUPERTINO, California — May 2, 2017 — Apple ® today announced financial results for its fiscal 2017 second quarter ended April 1, 2017. The Company posted quarterly revenue of $52.9 billion and quarterly earnings per diluted share of $2.10. These results compare to revenue of $50.6 billion and earnings per diluted share of $1.90 in the year-ago quarter. International sales accounted for 65 percent of the quarter’s revenue.

“We are proud to report a strong March quarter, with revenue growth accelerating from the December quarter and continued robust demand for iPhone 7 Plus,” said Tim Cook, Apple’s CEO. “We’ve seen great customer response to both models of the new iPhone 7 (PRODUCT)RED Special Edition and we’re thrilled with the strong momentum of our Services business, with our highest revenue ever for a 13-week quarter. Looking ahead, we are excited to welcome attendees from around the world to our annual Worldwide Developers Conference next month in San Jose.”

Apple also announced that its Board of Directors has authorized an increase of $50 billion to the Company’s program to return capital to shareholders and is extending the program timeframe by four quarters. Under the expanded program, Apple plans to spend a cumulative total of $300 billion by the end of March 2019.

“We generated strong operating cash flow of $12.5 billion and returned over $10 billion to our investors in the March quarter,” said Luca Maestri, Apple’s CFO. “Given the strength of our business and our confidence in our future, we are happy to announce another $50 billion increase to our capital return program today.”

As part of the latest update to the program, the Board has increased its share repurchase authorization to $210 billion from the $175 billion level announced a year ago. The Company also expects to continue to net-share-settle vesting restricted stock units.

The Board has approved a 10.5% increase to the Company’s quarterly dividend, and has declared a dividend of $0.63 per share of the Company’s common stock, payable on May 18, 2017 to shareholders of record as of the close of business on May 15, 2017.

From the inception of its capital return program in August 2012 through March 2017, Apple has returned over $211 billion to shareholders, including $151 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 2017 third quarter:
•
revenue between $43.5 billion and $45.5 billion
•
gross margin between 37.5 percent and 38.5 percent
•
operating expenses between $6.6 billion and $6.7 billion
•
other income/(expense) of $450 million
•
tax rate of 25.5 percent

Apple will provide live streaming of its Q2 2017 financial results conference call beginning at 2:00 p.m. PDT on May 2, 2017 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 return of capital. 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 24, 2016, its Form 10-Q for the fiscal quarter ended December 31, 2016, and its Form 10-Q for the fiscal quarter ended April 1, 2017 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, macOS, 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 more than 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.


© 2017 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.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In millions, except number of shares which are reflected in thousands and per share amounts)
 
 
Three Months Ended
 
Six Months Ended
 
April 1,
2017
 
March 26,
2016
 
April 1,
2017
 
March 26,
2016
Net sales
$
52,896

 
$
50,557

 
$
131,247

 
$
126,429

Cost of sales (1)
32,305

 
30,636

 
80,480

 
76,085

Gross margin
20,591

 
19,921

 
50,767

 
50,344

 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
Research and development (1)
2,776

 
2,511

 
5,647

 
4,915

Selling, general and administrative (1)
3,718

 
3,423

 
7,664

 
7,271

Total operating expenses
6,494

 
5,934

 
13,311

 
12,186

 
 
 
 
 
 
 
 
Operating income
14,097

 
13,987

 
37,456

 
38,158

Other income/(expense), net
587

 
155

 
1,408

 
557

Income before provision for income taxes
14,684

 
14,142

 
38,864

 
38,715

Provision for income taxes
3,655

 
3,626

 
9,944

 
9,838

Net income
$
11,029

 
$
10,516

 
$
28,920

 
$
28,877

 
 
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
 
 
Basic
$
2.11

 
$
1.91

 
$
5.50

 
$
5.22

Diluted
$
2.10

 
$
1.90

 
$
5.46

 
$
5.19

 
 
 
 
 
 
 
 
Shares used in computing earnings per share:
 
 
 
 
 
 
 
Basic
5,225,791

 
5,514,381

 
5,262,226

 
5,536,656

Diluted
5,261,688

 
5,540,886

 
5,294,841

 
5,567,506

 
 
 
 
 
 
 
 
Cash dividends declared per share
$
0.57

 
$
0.52

 
$
1.14

 
$
1.04

 
 
 
 
 
 
 
 
(1)  Includes share-based compensation expense as follows:
Cost of sales
$
217

 
$
191

 
$
446

 
$
395

Research and development
$
575

 
$
468

 
$
1,164

 
$
934

Selling, general and administrative
$
425

 
$
389

 
$
863

 
$
797






Apple Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In millions, except number of shares which are reflected in thousands and par value)
 
 
April 1,
2017
 
September 24,
2016
ASSETS:
Current assets:
 
 
 
Cash and cash equivalents
$
15,157

 
$
20,484

Short-term marketable securities
51,944

 
46,671

Accounts receivable, less an allowance o f $5 3 at each period end
11,579

 
15,754

Inventories
2,910

 
2,132

Vendor non-trade receivables
9,033

 
13,545

Other current assets
11,367

 
8,283

Total current assets
101,990

 
106,869

 
 
 
 
Long-term marketable securities
189,740

 
170,430

Property, plant and equipment, net
27,163

 
27,010

Goodwill
5,473

 
5,414

Acquired intangible assets, net
2,617

 
3,206

Other non-current assets
7,549

 
8,757

Total assets
$
334,532

 
$
321,686

 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
 
 
 
Accounts payable
$
28,573

 
$
37,294

Accrued expenses
23,096

 
22,027

Deferred revenue
7,682

 
8,080

Commercial paper
9,992

 
8,105

Current portion of long-term debt
3,999

 
3,500

Total current liabilities
73,342

 
79,006

 
 
 
 
Deferred revenue, non-current
3,107

 
2,930

Long-term debt
84,531

 
75,427

Other non-current liabilities
39,470

 
36,074

Total liabilities
200,450

 
193,437

 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
Shareholders’ equity:
 
 
 
Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 5,205,815 and 5,336,166 shares issued and outstanding, respectively
33,579

 
31,251

Retained earnings
100,925

 
96,364

Accumulated other comprehensive income/(loss)
(422
)
 
634

Total shareholders’ equity
134,082

 
128,249

Total liabilities and shareholders’ equity
$
334,532

 
$
321,686






Apple Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In millions)
 
 
Six Months Ended
 
April 1,
2017
 
March 26,
2016
Cash and cash equivalents, beginning of the period
$
20,484

 
$
21,120

Operating activities:
 
 
 
Net income
28,920

 
28,877

Adjustments to reconcile net income to cash generated by operating activities:
 
 
 
Depreciation and amortization
5,319

 
5,431

Share-based compensation expense
2,473

 
2,126

Deferred income tax expense
2,822

 
3,092

Other
(209
)
 
308

Changes in operating assets and liabilities:
 
 
 
Accounts receivable, net
4,183

 
4,538

Inventories
(778
)
 
68

Vendor non-trade receivables
4,512

 
5,899

Other current and non-current assets
(896
)
 
186

Accounts payable
(6,862
)
 
(9,388
)
Deferred revenue
(221
)
 
219

Other current and non-current liabilities
316

 
(2,292
)
Cash generated by operating activities
39,579

 
39,064

Investing activities:
 
 
 
Purchases of marketable securities
(99,821
)
 
(86,242
)
Proceeds from maturities of marketable securities
12,429

 
9,148

Proceeds from sales of marketable securities
60,454

 
50,051

Payments made in connection with business acquisitions, net
(67
)
 
(140
)
Payments for acquisition of property, plant and equipment
(6,309
)
 
(5,948
)
Payments for acquisition of intangible assets
(126
)
 
(657
)
Payments for strategic investments
—

 
(126
)
Other
116

 
(196
)
Cash used in investing activities
(33,324
)
 
(34,110
)
Financing activities:
 
 
 
Proceeds from issuance of common stock
273

 
247

Excess tax benefits from equity awards
225

 
264

Payments for taxes related to net share settlement of equity awards
(788
)
 
(751
)
Payments for dividends and dividend equivalents
(6,134
)
 
(5,871
)
Repurchases of common stock
(18,012
)
 
(13,530
)
Proceeds from issuance of term debt, net
10,975

 
15,584

Change in commercial paper, net
1,879

 
(503
)
Cash used in financing activities
(11,582
)
 
(4,560
)
Increase/(Decrease) in cash and cash equivalents
(5,327
)
 
394

Cash and cash equivalents, end of the period
$
15,157

 
$
21,514

Supplemental cash flow disclosure:
 
 
 
Cash paid for income taxes, net
$
6,878

 
$
6,630

Cash paid for interest
$
1,007

 
$
565







 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exhibit 99.2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Apple Inc.
Q2 2017 Unaudited Summary Data
(Units in thousands, Revenue in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Q2 2017
 
 
Q1 2017
 
Q2 2016
 
Sequential Change
 
       Year/Year Change
 
 
 
 
 
Revenue
 
 
 
 
Revenue
 
 
 
Revenue
 
 
 
Revenue
 
 
 
Revenue
Operating Segments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Americas
 
 
 
$
21,157

 
 
 
 
$
31,968

 
 
 
$
19,096

 
 
 
-34
 %
 
 
 
11
 %
 
Europe
 
 
 
12,733

 
 
 
 
18,521

 
 
 
11,535

 
 
 
-31
 %
 
 
 
10
 %
 
Greater China
 
 
 
10,726

 
 
 
 
16,233

 
 
 
12,486

 
 
 
-34
 %
 
 
 
-14
 %
 
Japan
 
 
 
4,485

 
 
 
 
5,766

 
 
 
4,281

 
 
 
-22
 %
 
 
 
5
 %
 
Rest of Asia Pacific
 
 
 
3,795

 
 
 
 
5,863

 
 
 
3,159

 
 
 
-35
 %
 
 
 
20
 %
Total Apple
 
 
 
$
52,896

 
 
 
 
$
78,351

 
 
 
$
50,557

 
 
 
-32
 %
 
 
 
5
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Q2 2017
 
 
Q1 2017
 
Q2 2016
 
Sequential Change
 
       Year/Year Change
 
 
 
Units
 
Revenue
 
 
Units
 
Revenue
 
Units
 
Revenue
 
Units
 
Revenue
 
Units
 
Revenue
Product Summary
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
iPhone (1)
 
50,763

 
$
33,249

 
 
78,290

 
$
54,378

 
51,193

 
$
32,857

 
-35
 %
 
-39
 %
 
-1
 %
 
1
 %
 
iPad (1)
 
8,922

 
3,889

 
 
13,081

 
5,533

 
10,251

 
4,413

 
-32
 %
 
-30
 %
 
-13
 %
 
-12
 %
 
Mac (1)
 
4,199

 
5,844

 
 
5,374

 
7,244

 
4,034

 
5,107

 
-22
 %
 
-19
 %
 
4
 %
 
14
 %
 
Services (2)
 
 
 
7,041

 
 
 
 
7,172

 
 
 
5,991

 
 
 
-2
 %
 
 
 
18
 %
 
Other Products (1)(3)
 
 
 
2,873

 
 
 
 
4,024

 
 
 
2,189

 
 
 
-29
 %
 
 
 
31
 %
Total Apple
 
 
 
$
52,896

 
 
 
 
$
78,351

 
 
 
$
50,557

 
 
 
-32
 %
 
 
 
5
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)
Includes deferrals and amortization of related software upgrade rights and non-software services.
 
 
 
 
 
 
 
 
(2)
Includes revenue from Digital Content and 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.