Apple
APPLE INC (Form: 8-K, Received: 01/31/2017 16:32:57)


 
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
January 31, 2017
Date of Report (Date of earliest event reported)
 
 
G325078G0426062022046A01.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))
 





Item 2.02
Results of Operations and Financial Condition.
On January 31, 2017 , Apple Inc. (“Apple”) issued a press release regarding Apple’s financial results for its first fiscal quarter ended December 31, 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 January 31, 2017.
 
 
99.2
  
Data sheet issued by Apple Inc. on January 31, 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:
January 31, 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 January 31, 2017.
 
 
99.2
  
Data sheet issued by Apple Inc. on January 31, 2017.






Exhibit 99.1


Apple Reports Record First Quarter Results

iPhone, Services, Mac and Apple Watch Set All-Time Records


CUPERTINO, California - January 31, 2017 - Apple ® today announced financial results for its fiscal 2017 first quarter ended December 31, 2016. The Company posted all-time record quarterly revenue of $78.4 billion and all-time record quarterly earnings per diluted share of $3.36. These results compare to revenue of $75.9 billion and earnings per diluted share of $3.28 in the year-ago quarter. International sales accounted for 64 percent of the quarter's revenue.

"We're thrilled to report that our holiday quarter results generated Apple's highest quarterly revenue ever, and broke multiple records along the way. We sold more iPhones than ever before and set all-time revenue records for iPhone, Services, Mac and Apple Watch," said Tim Cook, Apple's CEO. "Revenue from Services grew strongly over last year, led by record customer activity on the App Store, and we are very excited about the products in our pipeline."

"Our outstanding business performance resulted in a new all-time record for earnings per share, and over $27 billion in operating cash flow," said Luca Maestri, Apple's CFO. "We returned nearly $15 billion to investors through share repurchases and dividends during the quarter, bringing cumulative payments through our capital return program to over $200 billion."

Apple is providing the following guidance for its fiscal 2017 second quarter:
revenue between $51.5 billion and $53.5 billion
gross margin between 38 percent and 39 percent
operating expenses between $6.5 billion and $6.6 billion
other income/(expense) of $400 million
tax rate of 26 percent

Apple's board of directors has declared a cash dividend of $0.57 per share of the Company's common stock. The dividend is payable on February 16, 2017 to shareholders of record as of the close of business on February 13, 2017.

Apple will provide live streaming of its Q1 2017 financial results conference call beginning at 2:00 p.m. PST on January 31, 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), 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 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 and its Form 10-Q for the fiscal quarter ended December 31, 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, 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.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except number of shares which are reflected in thousands and per share amounts)
 
 
Three Months Ended
 
December 31,
2016
 
December 26,
2015
Net sales
$
78,351

 
$
75,872

Cost of sales (1)
48,175

 
45,449

Gross margin
30,176

 
30,423

 
 
 
 
Operating expenses:
 
 
 
Research and development (1)
2,871

 
2,404

Selling, general and administrative (1)
3,946

 
3,848

Total operating expenses
6,817

 
6,252

 
 
 
 
Operating income
23,359

 
24,171

Other income/(expense), net
821

 
402

Income before provision for income taxes
24,180

 
24,573

Provision for income taxes
6,289

 
6,212

Net income
$
17,891

 
$
18,361

 
 
 
 
Earnings per share:
 
 
 
Basic
$
3.38

 
$
3.30

Diluted
$
3.36

 
$
3.28

 
 
 
 
Shares used in computing earnings per share:
 
 
 
Basic
5,298,661

 
5,558,930

Diluted
5,327,995

 
5,594,127

 
 
 
 
Cash dividends declared per share
$
0.57

 
$
0.52

 
 
 
 
(1)  Includes share-based compensation expense as follows:
Cost of sales
$
229

 
$
204

Research and development
$
589

 
$
466

Selling, general and administrative
$
438

 
$
408







Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except number of shares which are reflected in thousands and par value)
 
 
December 31,
2016
 
September 24,
2016
ASSETS:
Current assets:
 
 
 
Cash and cash equivalents
$
16,371

 
$
20,484

Short-term marketable securities
44,081

 
46,671

Accounts receivable, less an allowance o f $5 3 in each period
14,057

 
15,754

Inventories
2,712

 
2,132

Vendor non-trade receivables
13,920

 
13,545

Other current assets
12,191

 
8,283

Total current assets
103,332

 
106,869

 
 
 
 
Long-term marketable securities
185,638

 
170,430

Property, plant and equipment, net
26,510

 
27,010

Goodwill
5,423

 
5,414

Acquired intangible assets, net
2,848

 
3,206

Other non-current assets
7,390

 
8,757

Total assets
$
331,141

 
$
321,686

 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
 
 
 
Accounts payable
$
38,510

 
$
37,294

Accrued expenses
23,739

 
22,027

Deferred revenue
7,889

 
8,080

Commercial paper
10,493

 
8,105

Current portion of long-term debt
3,499

 
3,500

Total current liabilities
84,130

 
79,006

 
 
 
 
Deferred revenue, non-current
3,163

 
2,930

Long-term debt
73,557

 
75,427

Other non-current liabilities
37,901

 
36,074

Total liabilities
198,751

 
193,437

 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
Shareholders’ equity:
 
 
 
Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 5,255,423 and 5,336,166 shares issued and outstanding, respectively
32,144

 
31,251

Retained earnings
100,001

 
96,364

Accumulated other comprehensive income/(loss)
245

 
634

Total shareholders’ equity
132,390

 
128,249

Total liabilities and shareholders’ equity
$
331,141

 
$
321,686







Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
 
 
Three Months Ended
 
December 31,
2016
 
December 26,
2015
Cash and cash equivalents, beginning of the period
$
20,484

 
$
21,120

 
 
 
 
Operating activities:
 
 
 
Net income
17,891

 
18,361

Adjustments to reconcile net income to cash generated by operating activities:
 
 
 
Depreciation and amortization
2,987

 
2,954

Share-based compensation expense
1,256

 
1,078

Deferred income tax expense
1,452

 
1,592

Other
(274
)
 
110

Changes in operating assets and liabilities:
 
 
 
Accounts receivable, net
1,697

 
3,896

Inventories
(580
)
 
(102
)
Vendor non-trade receivables
(375
)
 
1,826

Other current and non-current assets
(1,446
)
 
(1,058
)
Accounts payable
2,460

 
(852
)
Deferred revenue
42

 
(29
)
Other current and non-current liabilities
1,946

 
(313
)
Cash generated by operating activities
27,056

 
27,463

 
 
 
 
Investing activities:
 
 
 
Purchases of marketable securities
(54,272
)
 
(47,836
)
Proceeds from maturities of marketable securities
6,525

 
3,514

Proceeds from sales of marketable securities
32,166

 
28,262

Payments made in connection with business acquisitions, net
(17
)
 
(86
)
Payments for acquisition of property, plant and equipment
(3,334
)
 
(3,612
)
Payments for acquisition of intangible assets
(86
)
 
(394
)
Payments for strategic investments

 
(126
)
Other
(104
)
 
(172
)
Cash used in investing activities
(19,122
)
 
(20,450
)
 
 
 
 
Financing activities:
 
 
 
Proceeds from issuance of common stock

 
1

Excess tax benefits from equity awards
178

 
224

Payments for taxes related to net share settlement of equity awards
(629
)
 
(597
)
Payments for dividends and dividend equivalents
(3,130
)
 
(2,969
)
Repurchases of common stock
(10,851
)
 
(6,863
)
Change in commercial paper, net
2,385

 
(1,240
)
Cash used in financing activities
(12,047
)
 
(11,444
)
 
 
 
 
Increase/(Decrease) in cash and cash equivalents
(4,113
)
 
(4,431
)
Cash and cash equivalents, end of the period
$
16,371

 
$
16,689

 
 
 
 
Supplemental cash flow disclosure:
 
 
 
Cash paid for income taxes, net
$
3,510

 
$
3,398

Cash paid for interest
$
497

 
$
396







 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exhibit 99.2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Apple Inc.
Q1 2017 Unaudited Summary Data
(Units in thousands, Revenue in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Q1 2017
 
 
Q4 2016
 
Q1 2016
 
Sequential Change
 
       Year/Year Change
 
 
 
 
 
Revenue
 
 
 
 
Revenue
 
 
 
Revenue
 
 
 
Revenue
 
 
 
Revenue
Operating Segments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Americas
 
 
 
$
31,968

 
 
 
 
$
20,229

 
 
 
$
29,325

 
 
 
58
%
 
 
 
9
 %
 
Europe
 
 
 
18,521

 
 
 
 
10,842

 
 
 
17,932

 
 
 
71
%
 
 
 
3
 %
 
Greater China
 
 
 
16,233

 
 
 
 
8,785

 
 
 
18,373

 
 
 
85
%
 
 
 
-12
 %
 
Japan
 
 
 
5,766

 
 
 
 
4,324

 
 
 
4,794

 
 
 
33
%
 
 
 
20
 %
 
Rest of Asia Pacific
 
 
 
5,863

 
 
 
 
2,672

 
 
 
5,448

 
 
 
119
%
 
 
 
8
 %
Total Apple
 
 
 
$
78,351

 
 
 
 
$
46,852

 
 
 
$
75,872

 
 
 
67
%
 
 
 
3
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Q1 2017
 
 
Q4 2016
 
Q1 2016
 
Sequential Change
 
       Year/Year Change
 
 
 
Units
 
Revenue
 
 
Units
 
Revenue
 
Units
 
Revenue
 
Units
 
Revenue
 
Units
 
Revenue
Product Summary
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
iPhone (1)
 
78,290

 
$
54,378

 
 
45,513

 
$
28,160

 
74,779

 
$
51,635

 
72
%
 
93
%
 
5
 %
 
5
 %
 
iPad (1)
 
13,081

 
5,533

 
 
9,267

 
4,255

 
16,122

 
7,084

 
41
%
 
30
%
 
-19
 %
 
-22
 %
 
Mac (1)
 
5,374

 
7,244

 
 
4,886

 
5,739

 
5,312

 
6,746

 
10
%
 
26
%
 
1
 %
 
7
 %
 
Services (2)
 
 
 
7,172

 
 
 
 
6,325

 
 
 
6,056

 
 
 
13
%
 
 
 
18
 %
 
Other Products (1)(3)
 
 
 
4,024

 
 
 
 
2,373

 
 
 
4,351

 
 
 
70
%
 
 
 
-8
 %
Total Apple
 
 
 
$
78,351

 
 
 
 
$
46,852

 
 
 
$
75,872

 
 
 
67
%
 
 
 
3
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(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.